In conjunction with the post that's just been put up relating to the XLRI and NIF MoU I wanted to add a little note on the extension of the IPR system to traditional knowledge.
The advantage of extending the existing IPR system to protect traditional knowledge is that it will generate incentives amongst indigenous peoples to conserve and protect their culture and environment. This assumption is drawn from the experience of the Aboriginal and Torres Strait Islander artists in Australia who obtained a national certification trademark which in turn promoted the marketing of their art while deterring those who falsely claimed that there products were of aboriginal origin.[1]
However it must also be understood that extending the existing IPR system will be an attempt to fit two different systems which arose from different cultural backgrounds together imperfectly. Due to the differing nature of traditional knowledge and IPR community knowledge which is meant to be for the benefit of the members of that community will end up being privatized.
There are also problems with the implementation of an IPR extension like the fact that often indigenous people do not often have the means to claim and protect their legal rights. Secondly local communities place this kind of knowledge in their own rights system and it is difficult for them to understand the privatization and commoditization of their resources. In this context the efforts of the Honeybee Network and Sristi are truly laudable.
[1] Marianna Annas, “Label of Authenticity: A Certification Trademark for Goods and Services of Indigenous Origin” from http://www.austlii.edu.au/au/journals/AboriginalLB/1997/20.html last visited on January 18th 2008.
Thursday, January 31, 2008
IPR and Traditional Knowledge: Irreconcilable differences?
From the medicine cabinet
The Financial Express brings us another development in the battle between big pharma companies and the generic industry. What really stood out for me was the generic industry’s indignant stand re-affirming their status as the “consumer’s best friend.” In my opinion both the generic industry as well as developing countries need to push much harder for cheaper medicines, A. 31 bis and take advantage of compulsory licensing provisions where available. I always end up looking at these situations from an Indian perspective and I cannot understand why this debate is becoming increasingly complex. If the generic industry is our best friend why are medicines getting more expensive? Similarly the statements we hear from the Ministry of Health on occasion. We have compulsory licensing provisions. Why are we not using them? Brazil did it, Thailand did it. We are a poor country. We have many people suffering. We need cheaper medicines. Now is that so hard?
Also, I realize that companies launching authorized versions of their own drugs will lead to the profit margins of the generic industry being slashed but what price range will these generic versions be sold at? Are these medicines going to be cheaper and if so then maybe it was the big pharma companies that ended up doing the consumer a service in the end.
As reported in http://www.financialexpress.com/printer/news/266297/
The bitterest pill
Posted online: Monday, January 28, 2008 at 2212 hrs
"If we have the feeling that something is rotten in the state, then let's take the opportunity to find out." So said Neelie Kroes, the European Commission's competition commissioner seeking to justify a spectacular raid recently on big pharmaceutical companies. Officials are investigating whether sellers of expensive branded pills conspired together to delay the launch of cheap generic rivals. America's Federal Trade Commission (FTC) is also looking into it.
Many of Big Pharma's biggest blockbusters will soon lose their patent protection. Deloitte, a consultancy, estimates that $55 billion of products will go off patent in 2009 and will then face competition. At the same time, pharma bosses are being asked to defend patents in costly legal battles against an increasingly confident and litigious generics industry. As generics firms evolve from mere copycats into innovators in their own right, many such firms led by Israel's Teva, India's Ranbaxy and Dr Reddy's Laboratories are vigorously challenging patents.The best way out for the established drugs industry would be to find lots of clever new blockbusters to replace the ones going off-patent. But as the industry's sagging share valuations suggest, the new-drugs pipelines at big firms have run dry. So their managers are relying on two controversial new strategies. First, they are settling the lawsuits brought by generics firms, sometimes paying them to delay launching cheap pills. Novartis, a big Swiss firm, recently made a private settlement for Dr Reddy's to drop a lawsuit in return for the Indian firm delaying the launch of a generic rival to Exelon, its Alzheimer's remedy. This month it emerged that GlaxoSmithKline (GSK), a big British pharmaceutical firm, has also settled a patent lawsuit with Ranbaxy concerning the generics firm's launch of a cheap version of Imitrex, GSK's migraine reliever.
Under American laws designed to encourage generic drugs, which save money for patients, the first generic maker to win regulatory approval for its version of any given branded drug is supposed to enjoy a six-month monopoly. This promised pot of gold was designed to support small generics firms but Big Pharma has found a loophole. It is pre-emptively launching generic versions of its own branded pills, which wipes out those six months of monopoly profits and undermines the economics of generics firms.
Merck, a big American pharmaceuticals firm, is soon expected to launch an authorised generic version of Fosamax, an osteoporosis drug that is due to lose patent protection in February. A recent survey of globalbranded-drugs firms by Cutting Edge Information, a consultancy, found that a third of them had launched authorised generics between 2005 and 2007 and the number will grow to 44% between 2008 and 2010. Pfizerhas set up an in-house division to handle such generics.
The recent steps taken by regulators in America and Europe to investigate Big Pharma looks like good news for generics firms unless, that is, some of them turn out to have been complicit in the alleged dirty tricks. Earlier this month, America's FTC extended its probe to include generics companies. And during last week's raid by European investigators, one of the firms targeted was Teva, a generics pioneer. The generics industry is defiant, arguing that it remains the consumer's best friend despite its settlements with the enemy. Kathleen Jaeger, head of the Generic Pharmaceutical Association, insists that officials must avoid taking action that "sweeps the bad settlements in with the good settlements". It remains to be seen whether the upstart pillmakers have been playing for time or selling out.
Moves to protect traditional knowledge
In an encouraging move for innovators in the rural areas of North East India XLRI has entered into a MoU with the National Innovation Foundation (NIF) to assess innovations and nominate the same for the national innovation award and granting resources for its protection through IP. This comes on the heels of numerous efforts by Sristi to create a database of innovations on a grass-root level. The move promises to be rewarding for all stakeholders and another step by the Government in the promotion of the protection of traditional knowledge.
Also on the anvil is an ambitious 2 million dollar project, the Traditional Knowledge Digital Library, which seeks to document India’s traditional medical knowledge. The electronic encyclopedia is estimated to be 30 million pages and available in 5 languages – English, French, Spanish, German and Japanese – and is one of a kind. Perhaps this shall work to deter the expensive costs of litigation that the Government of India has found itself embroiled in. It is estimated that the Government has spent over $ 6 million in litigation fighting the Neem and Turmeric cases alone.
XLRI, NIF sign MoU to create research councilState Bureau
Posted online: Tuesday, January 29, 2008 at 0045 hrs
Jamshedpur Jan 28B-School XLRI has entered into a memorandum of understanding (MoU) with the National Innovation Foundation (NIF) for creation of a research advisory council (RAC). The council will assess different innovations sourced by the NIF from Jharkhand, Bihar, part of West Bengal, Orissa, Chhattisgarh and eastern Uttar Pradesh.The innovations will be sourced from the NIF's national register for grassroots innovations. The selected ones will be supported through nomination to the biennial national innovation award, refining the product, protection of intellectual property rights associated with it and offering risk capital investment by NIF's micro venture fund for setting up enterprises. According to the MoU signed here on Sunday by NIF national coordinator (business development & micro venture) L Chinzah and XLRI director Father E Abraham, the RAC will comprise professors from the B-School, industry experts and NIF members.
The XLRI's student body, Social Initiative Group for Managerial Assistance, will also be involved in mentoring and monitoring those projects. The Sigma will also assist in market benchmarking innovations and developing business plans.The NIF plans to provide institutional support in scouting, spawning, sustaining and scaling up grassroots innovations and help them grow into self-supporting ventures. Its 'Honey Bee' database of around 10,000 innovations collected and documented by Sristi is part of the national register of innovation managed and supported by the NIF.According to Chinzah, the NIF was looking forward for support from the Sigma and Face for "adding value to" the innovations it came across in the eastern region during scouting works. "As the NIF cann't do much on its own following the networking philosophy, we are trying to build capacities here so that existing institutions like XLRI can be brought to the platform to add value to such innovations," said Chinzah.Speaking on the occasion, the XLRI director said the Sigma and faculty supported initiative would be of much use to the B-School as "our students need to go out to villages and see what the real world looks like".
Pushing for Compulsory Licensing: Pharma Companies heading closer to Doha.
The pharmaceutical industry is off late pushing for an invocation of the Compulsory Licensing of higher end drugs in
Readers will remember an earlier blog posting commented on Natco's application for Tarceva. It now turns out that Natco has also applies for a compulsory license for Pfizer's 'Sutent'. CH Unnikrishnan of the Mint reports:
“Even as the government considers pricing patented drugs sold in
Known as compulsory licensing, this provision can be invoked by a country if a drug maker is willing to make and supply copies of patented drugs in a medical emergency or to export to least developed countries, which are yet to be covered by the TRIPS regime.
Setting off what could become a trend, Hyderabad-based cancer specialty company Natco Pharma Ltd has requested the government to grant it a compulsory licence for two high-cost drugs: Sutent, a renal cancer drug of Pfizer Inc., and Swiss drug maker F Hoffmann-La Roche Ltd’s lung cancer medication, Tarceva. Both drugs are currently protected under global patents. “We have applied for granting compulsory licence for Erlotinib, the generic version of Tarceva, and Sunitinib (Sutent) to the government,” Natco’s chief operating officer Rajeev Nannapaneni said.
Cipla Ltd, one of the country’s top three drug makers, has similar plans.
The target of compulsory licence requests are largely new cancer drugs already launched by multinational firms under patent protection. Often, these drugs are priced at the same level across the world. Tarceva, for instance, costs about Rs1.5 lakh for a month’s treatment. Another cancer drug, Glivec, marketed by Novartis AG, is priced at Rs1.2 lakh for a five-week treatment cycle. Pfizer’s Sutent, currently awaiting a patent grant in
“The improved operating environment (IP and regulatory) in
Cipla says it wants to sell the drug at Rs1,600 a tablet, one-third of its market cost. Natco wants to price it at about Rs1,000.
“Access to these medicines is a serious issue in a country like
In April, Union health minister Anbumani Ramadoss had asked Novartis to withdraw a patent litigation it is engaged in in
Patent experts say there are several clauses in Indian patents law that local drug makers can use to push for compulsory licences. Patent holders, for instance, are not allowed to claim their product prices are high because they do not have manufacturing facilities in the country. In such a scenario, the government can permit a local drug firm to make and sell the patented product at lower prices. Most of the patented drugs of multinational drug firms are imported today.
Next, said Shamnad Basheer, an associate at the Oxford Centre of Intellectual Property Studies, patent rules allow multinational pharmaceutical firms, when granted a patent, a lead time of three years to bring the prices of their drugs to a level that does not inhibit patient access to the drug. After three years, if the government is convinced that the use of the drug is limited because it is not affordably priced, it can issue a compulsory licence to a drug maker that promises to bring prices down. “As of today, this can certainly kick in for a number of pharmaceutical process patents that were granted more than three years back,” Basheer said.
There is a third provision in the Indian Patents Act to enable a compulsory licence: if a globally patented drug was being manufactured in
“
According to the Doha Declaration of the WTO, compulsory licences to export to least developed nations have been made TRIPS-compatible. The rules mandate that the importing country must notify the WTO’s council for TRIPS of the name and expected quantity of the product, verify that it has insufficient or no manufacturing capacity for the product, and confirm that it has granted or intends to grant a compulsory licence.
Still, in all these instances, it is the WTO member-country’s responsibility to ensure and prove that its intent on compulsory licensing is in public interest. “In fact, it is widely thought that owing to the various preconditions, it is onerous to apply for and operate such a licence,” said Basheer.
From what is stated above, it is cleat that in cases such as NOVARTIS’ controversial drug ‘Glivec’, what must be taken into account by the Controller in deciding the grant of a compulsory license to CIPLA and others, is the use of the drug to public advantage. Furthermore, the time elapsed since the sealing of the patent and the measures already taken by the patentee or licensee to make full use of the invention also helps bolster their claim for the grant.
In a developing country such as India where death rates mount due to the mere fact that the right drug was not available to them, this move of the pharmaceutical companies is the need of the hour and indeed praiseworthy. While it is uncertain whether any form of compulsory license will be granted, it is certainly hoped that a look toward the thousands ailing in
EU to Take Taiwan to WTO over Compulsory Licensing Provision
Michael Macmanus of DigiTimes reports:
"A European Commission report published on January 30 has criticized Taiwan's compulsory licensing practices for recordable compact discs (CD-R), and the report recommends that the Commission should start World Trade Organization (WTO) proceedings if Taiwan does not take concrete steps to amend its patent law and reverse the compulsory license decisions against Philips within two months.
The report is a result of complaint filed last year by Royal Philips Electronics with the EU against the Taiwan government, which it claims was in violation of the WTO TRIPS (Trade Related Intellectual Property Rights) agreement.
Philips was appealing a July 2004 ruling by the Taiwan Intellectual Property Office (TIPO) that called for the compulsory licensing of five Philip's CD-R disc patents to Gigastorage, a second-tier optical disc maker in Taiwan. TIPO based its decision on the fact that Philips had refused to renegotiate the CD-R fixed royalty charge rate of US$0.035 per disc, despite the fact that OEM prices had fallen from US$5 in 1997 to US$0.19 in the first half of 2003.
At the time of the ruling against Philips, TIPO stated that under Taiwan patent law, it had to balance the considerations of intellectual property rights with the promotion of domestic Taiwan industrial development, with the perceived unreasonable royalties charges tipping the case in favor of Gigastorage.
According to comments made by EU Commissioner Peter Mandelson, the EU supports the use of compulsory licensing in specific circumstances, in particular to facilitate access to medicines, but Mandelson implied that Taiwan had abused the system in this case.
The EU report also stated that although the TRIPs agreement requires that compulsory licenses only be issued for goods intended chiefly for the domestic market, the Taiwan government ignored that provision.
However, Taiwan's MOEA stated in 2006 that the TIPO ruling on compulsory licensing was specific to Gigastorage only and restricted to the licensee's production of discs for sale in Taiwan.
In April of last year, Gigastorage applied with the TIPO to terminate the compulsory license, stating that since it had decided to shift its production of CD-R discs to Thailand, the TIPO-granted compulsory license was to become meaningless. Although the Commission report noted that the compulsory licenses were terminated last June, the EU still views it as necessary to have the patent law amended, as the termination was not retroactive.
In September, Gigastorage also announced that it had reached a preliminary settlement with Philips regarding the infringement of the CD-R patents."
Doha Style Compulsory Licenses for Exports: The Politics....
Developing countries moved to make this a permanent amendment i.e. Article 31bis. However, if Article 31 bis is to come into force, it requires 67 percent of WTO’s members to ratify it. By the December 2007 deadline, only 13 of 151 WTO countries had ratified it. Fortunately, the WTO pushed back the ratification deadline to December 2009. Meanwhile, the 2003 waiver remains in effect. And it is this because this temporary measure is still in force that section 92A of the Indian patent regime remains perfectly compatible with TRIPS.
The interesting question is: will more WTO members wake up and have the courage to sign on to make Art 31 bis a reality? Developing countries clearly need to come together and demonstrate some collective will to see this through--after all, they constitute the majority at the WTO and it is in their best interest to avoid falling prey to the bulling tactics of their economically superior trading partners.
Steve Seidenberg of Inside Counsel has this interesting report on the politics surrounding the Article 31 bis amendment and why we haven't seen enough member states sign on to this as yet. Unfortunately, he got my designation wrong--it's been several months now since I finished teaching at GW law school.
"A lot of drug companies are getting increasingly nervous about the ability of developing countries to override their patent rights in the interest of public health. In the past year, both Brazil and Thailand issued compulsory licenses for Efavirenz, a drug used to treat people infected with HIV/AIDS. Thailand overrode Merck & Co.’s patent on Efavirenz in December 2006. Brazil overrode it in May 2007.
The countries acted under Article 31 of the WTO’s IP treaty, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).
Article 31 allows countries to issue compulsory licenses under certain conditions, and critics say neither Thailand nor Brazil met them.
“What happened recently in Thailand and Brazil ... was an abuse of TRIPs,” says Brad Huther, senior adviser for intellectual property at the U.S. Chamber of Commerce. He alleges the governments in those countries took the patents because they didn’t want to pay royalties, preferring to spend government funds on other things.
But things might get a lot worse for the drug companies. Under proposed Article 31bis, the WTO would allow countries that can’t make their own generic drugs to import them under a compulsory license.
Companies that develop new drugs are concerned about the proposed rule, claiming it will make it too easy for countries to essentially steal patents. Others criticize the provision as too harsh, imposing an expensive, cumbersome and time-consuming process on poor countries. About the only thing the two sides agree on is that Article 31bis is turning into “a highly political issue,” says Shamnad Basheer, who teaches international patent law at George Washington University Law School.
Importing Drugs
WTO created Article 31bis to address a problem with Article 31, which allows a country to issue a compulsory license that only covers drugs made—and predominantly used—within the country’s borders. This is an insurmountable obstacle for many poor countries, which desperately need cheap medicines to combat epidemics such as HIV/AIDS, malaria and tuberculosis.
“The countries that most need these drugs lack the manufacturing capabilities to make the drugs,” says John Iwanicki, a pharmaceutical patent attorney in the Boston office of Banner & Witcoff.
The WTO’s member states attempted to solve this problem in 2003. They agreed that, under certain conditions, the WTO would waive the requirement that a compulsory license be limited to domestic use. A 2003 WTO Decision of the General Council sets out a detailed process whereby one country can issue a compulsory license to import drugs and a second country can issue a compulsory license to export the drugs to the needy country.
Two years later the WTO’s members agreed to permanently add this waiver to TRIPs as Article 31bis. For the waiver to be included, 67 percent of WTO’s members had to ratify it. But by the December 2007 deadline, only 13 of 151 WTO countries—about 8.6 percent—had ratified it. But Article 31bis isn’t dead yet. The WTO pushed back the ratification deadline to December 2009. Meanwhile, the 2003 waiver remains in effect.
Stealing Patents
The drug companies are one reason why so few countries have ratified Article 31bis. “They are lobbying a lot,” says Elizabeth Haanes, an international drug patent attorney at Sterne, Kessler, Goldstein & Fox in Washington, D.C.
The companies are worried that the countries will divert drugs from the poor people who need them and resell them in more developed countries, thus harming patentees’ full-price sales in those markets. Companies are also concerned that if drug prices are slashed in foreign countries this will generate political pressure in the U.S. to cut prices here, too.
As a result, many less-developed countries have been hesitant to ratify Article 31bis. “Smaller countries ... don’t want to make an enemy of the drug companies,” Haanes says.
Many who favor compulsory licenses also criticize Article 31bis. They complain that this provision and the 2003 waiver don’t go far enough and that the WTO-sanctioned process for getting drugs is too complicated, time-consuming and expensive.
They may have a point. In the four and a half years since the WTO enacted the 2003 waiver, only one country has used it—Rwanda in July 2007. Still, the mere threat of compulsory licenses is having an effect. “[I]t has allowed developing countries to negotiate better deals with drug companies,” Haanes says.
Lower Prices
Other experts predict that it is only a matter of time before politicians in small countries start recognizing the domestic political, social and economic benefits of importing cheap drugs.
Moreover, as countries gain experience using the compulsory license procedures of the 2003 waiver, they will find ways to speed up the process and make it less expensive. This may force drug companies to either cut prices in certain foreign markets or accept the low royalties that come from compulsory licenses. Most drug companies, however, aren’t so much concerned about losing revenue in these small markets as they are about the diversion of low-price drugs into more lucrative markets.
The lower prices should not have a major impact on the companies’ profits, according to some experts, because the countries seeking cut-rate prices have limited sales potential. “The markets [in countries such as Rwanda] are fairly small, and the financial incentives to sell in such markets are small,” Basheer says.
Drugmakers are more concerned with stopping diversion of the low-price drugs to other markets, and this is a manageable problem, according to many experts. “[A]lternate packaging and markings or color on the tablets/capsules [should] ... prevent or minimize this [danger of reimportation],” says Jamison Lynch, a pharmaceutical patent attorney in Mayer Brown’s Chicago office.
The biggest worry for drug companies, however, is that countries will abuse compulsory licenses, employing them in the absence of any public health crisis, simply because the government wants to pay less for drugs. “[I]f Article 31bis were to be abused like the current compulsory license provisions are abused, that adds to drug companies’ costs and risks,” Huther says. “I don’t think anyone has any reservations about getting drugs to developing countries, but we don’t want to see these rights abridged in a way that hurts patent owners.”
Wednesday, January 30, 2008
Novartis Patent Case: Supreme Court Stays Madras High Court Judgment
To recapitulate on the Novartis patent saga in the country, several leading pharmaceutical companies, including Ranbaxy, Sun Pharmaceuticals and CIPLA have consistently opposed the grant of a patent to Novartis’ blood cancer drug ‘Glivec”. The claim before the Intellectual Property Appellate Board was appealed against by Novartis with respect to the appointment of a technical member. This rejection was overturned by the Madras High Court, which held that the Chairman of the IPAB could, in fact, act as the technical member.As the Novartis saga continues, the Supreme Court on the 28th of January, 2008, has stayed this controversial Madras High Court order. While the final decision on the matter is yet to be taken, the Supreme Court has probably taken a step in the right direction. As was stated in a previous post there is no sense in stating that a body to decide technical matters in a patent claim, need not have a technical member on board!
Let’s hope at least this order of the Apex Court, is (and I cannot resist this pun) here to “stay”!
Tuesday, January 29, 2008
SpicyIP Tidbits: Of real estate, the pharma Nano, & open access
1. Punjab Univ dean proposes new model to share IP Rights here
Prof Daljit Singh, Dean, Faculty of Engineering and Technology, Panjab University, has proposed a new model for IPR sharing, similar to the strategies being applied for realty development.
He drew attention to the real estate development models, where, while conceding the rights of the realty developer or landowner, some portion of land is reserved for the general public, in the form of parks, etc. The same principle can, and must be, applied to intellectual property rights also, he said.
Comparisons, they say, are odious. But the parallels between pharma and realty are interesting indeed. The question is do realty developers actually reserve public space these days? I know of some undeveloped spaces in the heart of prime-estate south Delhi owned by a large real-estate group, immanently ‘park’-worthy, that are not at all accessible…
2. ET has exclusive information that “Two Wadia group companies — Kalabakan Investments and Bombay Burmah Trading — are set to buy Danone’s 25.1% stake in cookie major Britannia parked in a UK joint venture entity Associated Biscuits International Holdings (ABIH).”
Part of the deal appears to be that “Mr Wadia will a legal case and a complaint to the Indian government about the French partner violating JV norms. People close to the deal said the Indian partner appears to have agreed in-principle not to pursue a complaint about Danone violating the Press Note 1, and a legal case in Bombay High Court against its investment in Bangalore-based bio-nutritional company Avesthagen.”
However, Britannia’s IP complaint against Danone — that it registered and used the Tiger trademark without permission in overseas markets — will be separately resolved through an ongoing arbitration in Singapore. SpicyIP has posted about this earlier.
3. An interesting profile-interview of Wockhardt’s chief Habil Khorakiwala, who had a thing or two to say about the Indian pharma industry, was in TOI the other day:
He argues that the balance sheet of multinational companies have a lot of costs loaded in them that can be slashed. Typically, the cost of manufacturing accounts for 8-9%, research 15%, other costs work out to 50% and the rest are margins. "We need to work out an equivalent of the Nano (Tata's Rs 1 lakh car) for medicines in India."
Although the argument itself is old, some credit is due to the Tatas for having brought a whole nuance to the word 'nano' in the Indian lexicon.
4. Open access publishing takes off in India
Frederick Noronha of IANS writes about the growth of open access academic resources:
A small but growing number of Indian journals are moving to the free open access format of internet publishing.
"Many leading journals published in India are already open access. These include the journals published by the Indian Academy of Sciences, the Indian National Science Academy, Indian Council of Medical Research and the Calicut Medical College," Subbiah Arunachalam, a prominent Indian campaigner for open access, told IANS.
...Both the government of India-run National Informatics Centre and the Mumbai-based private firm MedKnow publish open access journals on behalf of about 75 societies.
"India publishes about 100 OA journals. Actually, these are hybrid journals - print plus electronic, with the print version sold against a subscription. No Indian journal charges a fee from the authors for publishing papers," said Arunachalam.
5. Rahman runs from Bollywood, according to this report, allegedly because of copyright and royalty issues:
A R Rahman is deliberately turning down big assignments here because of copyright and royalty issues regarding music sales. The reticent retainer of the raga and rhythm is reluctant to discuss the issue.
“It’s too complicated. But, yes, the issues do stop me from accepting more Bollywood offers. Those who want to work with me in Mumbai but won’t agree to my conditions, are going to other composers…”
Of course, Rahman has other distractions, like his Western-classical music conservatory (which the article goes on to talk about), and this rather sad reality TV show. But still, I am curious to know what his conditions are that prevent him thus…
Monday, January 28, 2008
Suven Life Sciences gets its 2nd U.S Patent
This is actually the second product patent that has been granted to Suven in America. The company’s website claims that it has been granted 3 product patents in the European Union and another 4 in India and also the company core area of research is in the area of New Chemical Entities.
For a company with a market cap of just Rs. 410 crores Suven is definitely doing well on the R&D front. Its mid-sized companies like Suven that vindicate India’s decision to upgrade its patent laws to allow for product patents.
Eco Patents Commons
A higher level of environmental consciousness pervaded the talks at the recently concluded World Economic Summit at Davos. Environment related issues and green friendly initiatives occupied a key place on the agenda.
In tandem, tone and tenor :
Corporate Titans in a spirit of environmental camaraderie have collaborated on a novel project that allows access to eco- patents while striking a balance between the twin task of fostering innovation and promoting social development….long held as irreconcilable dichotomies.
Called the Eco Patents Commons, the initiative is modeled on the lines of a ‘open source platform’ that allows the patent holder to pledge the patents and put it out in the public domain free of charge. Access and benefit sharing work as the operative words here.
Sharing knowledge and technology that protect the environment is one way to address a wide range of challenges and threats to our planet. One vital way to share such knowledge and technology is through making patented technology available. Yet, to date, there has been no organized effort to make patents available, without royalty, to help enable the world community to reduce waste, pollution, global warming, and energy demands.
Frumpy skepticism that patents stifle innovation and are inimical in a development country perspective could take cues from this model.
IBM, Nokia, Pitney Bowles and Sony, in partnership with the World Business Council for Sustainable Development (WBCSD), have compiled a portfolio of patents — the Eco-Patent Commons — that can be used in manufacturing and business processes.
Companies can pledge patents that save energy and water, reduce the production of hazardous waste, increase recycling or reduce the amount of material used in a process.
The organizers hope that the scheme will encourage researchers and industry to create, use and develop processes in an environmentally responsible way.
Weyerhaeuser says that the scheme was designed with the needs of developing countries in mind — though not uniquely so. "Intellectual property rights are mentioned often as a barrier to technology transfer. The commons will help with that issue."
For those you with more queries on how this works and are perhaps pondering on how to emulate this model for the Indian climate….heres an interesting list of FAQs’
A healthy departure from the oft resorted to ‘evergreening’ drive and intent…..
India and TRIPS Compliance: Protectionist Policies
The Email:
"Do you feel like you have to defend India's interpretation of TRIPS against outside attack? I felt that some of your responses sounded a little defensive in the end.
For example, the problem with the mailbox is that it was clear that India has made a political deal with local companies as a sop to the introduction of patents for products. That is the reality, and it was a disappointment to the international community and not done on any consistent legal basis within TRIPS. Why bother to defend this as a TRIPS-consistent action when it totally undercut any meaning to the mailbox?"
The Response:
"As to why I did the post, I think we need to strike a distinction between what is good for national policy and what is TRIPS compliant. For a long time, we were told by the US and EU that Art 39.3 required data exclusivity and that we were not compliant. And for many other issues, the stick always used was TRIPS. I wanted to debunk this a bit. TRIPS leaves a lot of flexibility —and as I argue, a number of provisions (barring the one on parallel imports, as I point out in my note) is TRIPS compliant. This being so, let’s not waste time engaging with TRIPS. Let’s begin moving over to the substantive policy side of the argument—i.e. Does the introduction of data exclusivity make sense for India or not?
Yes, India did want to support its home grown pharma companies and hence enacted section 11A (the mandating compulsory licensing provision). Doesn't the US do the same? And the EU. And Japan. In fact, I can point to plenty of examples where, under pressure from their domestic lobby, the US maintains laws that are inconsistent with the WTO. The Byrd amendment is an excellent case in point. Eleven countries filed an action against the US and won before the WTO.
Countries will only do that which is good for them, from a national policy perspective. And of course, some countries do not even have the room to do this, as they are bullied into regimes (that may not be in their best interest) by their big trading partners. Thankfully, India has reached a stage where she is economically more powerful and cannot be bullied anymore. So we have the luxury now of shifting the debate away from TRIPS and asking ourselves: is it bad to protect our home grown generics to some extent, after we’ve subjected them to a product patent regime? Particularly when a number of them have invested considerable sums of money into production of medicines, that get to be patented after 2005. It is protectionist—but is there something wrong per se with being protectionist. Almost everyone does it—are we any different?"
Sunday, January 27, 2008
Roche vs CIPLA: The Contours of Section 3(d)
Section 3(d) reads as below:
"the mere discovery of a new form of a known substance which does not result in increased efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such process results in a new product or employs at least one new reactant.
Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”
In essence, section 3(d) aims to prevent a phenomenon commonly referred to as “ever-greening”. The underlying assumption is that derivatives, such as salt forms, polymorphs, isomers etc that are structurally similar to known pharmaceutical substances are likely to be functionally equivalent as well--and if this is not the case and the new form of an existing substance works better than the old form, it is up-to the patent applicant to demonstrate this and claim a patent.
To this extent, section 3(d) draws a distinction between “evergreening” and incremental innovation. By making derivates with added efficacy patentable, section 3(d) encourages sequential developments of existing products or technologies that help bring in improved products to the market.
Now, in Roche vs CIPLA, the earlier known substance is Gefatinib. Roche then claims a structurally similar compound, Erlotinib. The question essentially is: is Erlotinib a derivative of Gefatinib? If it is a "derivative", then under the explanation to section 3(d), unless such
derivative demonstrates "a significant difference in property with regard to efficacy", it will be construed as the "same substance" as Gefatinib. It appears that even if
As a colleague of mine who wishes to remain anonymous and whom I deeply respect for his knowledge on both the Indian pharmaceutical industry and patent law writes and tells me:
"Structurally, they both have the common 4-quinazolinamine nucleus but the substitution patterns are quite different. They both are derivatives of 4-quinazolinamine, but are not really derivatives of each other (though it could be tenuously argued that any two compounds that have even the slightest of similarities could be interconverted.)
Such an argument could then be reduced ad absurdum to say that only one compound in any series of compounds having some structural similarity and acting by the same mchansim whould e patentable. That'll truly be absurd. It should also be noted that (a) erlotinib has an additional indication (combination with gemcitabine for pancreatic cancer) and (b) erlotinib ha it is own NCE exclusivity in the USA which shows that the FDA considered it to have a different active moiety from gefitinib which was marketed earlier."
I tend to agree with him. A compound that has some amount structural similarity with a prior compound cannot always be treated as it's "derivative". If this were always the case, then a large number of pharma compounds could be said to be "carbon" derivatives of some sort and therefore subject to section 3(d)!! Note in particular his last sentence which suggests that even if Erlotinib were treated as a derivative of Gefatinib (marketed as Iressa and a patent over which was recently rejected in India), then it is likely that since it has an additional use (pancreatic cancer) over and above Gefatinib, it ought to be able to fulfill the condition of "enhanced efficacy" under section 3(d).
Supreme Court on Copyrightability of Judgments: Guest Post
A Modicum of Flavour
"The decision in the case of Eastern Book Company v. D.B. Modak sees the Supreme Court taking tentative steps in altering the jurisprudence surrounding the concept of originality in Indian Copyright law. Leaning towards the “modicum of creativity” arguments followed in America the interpretation offered by the Court in this judgment is especially fascinating as it shows an inclination on the part of our Judiciary to move away from the close association that Indian copyright law shares with its English counterpart.
The basic fact situation is that SCC and SCC – Online were aggrieved by individuals who launched a software package entitled "The Laws" and "Jurix". Allegedly they infringed the copyright of the copy-edited judgments published by SCC (I figure the reason this was of such great concern was because the cost of the newer software was about a third of that of SCC). The said suits were founded, inter alia, on infringement of copyright and unfair competition.
The issues are -
• whether the copy-edited judgments reported by SCC were entitled to copyright protection as derivative works;
• what standard of originality is required by derivative works to evoke that protection;
• and whether the protection would be afforded to the entire text or only certain inputs.
The Court held as follows-
A distinction was made between substantive corrections which required the application of mind and more technical rectifications. It was held that technical or clerical alterations in the text like inserting correct punctuation, providing alternate citations, and the correction of minor errors although an aid to increased readability are too trivial to be granted copyright protection.
However, inputs put in the original text by the editors with regard to segregating the existing paragraphs by breaking them into separate paragraphs; adding internal paragraph numbering; and indicating the Judges who have dissented or concurred; must be treated differently.
“The task of paragraph numbering and internal referencing requires skill and judgment in great measure. The editor who inserts para numbering must know how legal argumentation and legal discourse is conducted and how a judgment of a court of law must read.”
Furthermore the Court went on to say “The High Court has already granted interim relief to the plaintiff-appellants [SCC] by directing that though the respondent-defendants shall be entitled to sell their CD-ROMS with the text of the judgments of the Supreme Court along with their own head notes, editorial notes, if any, they should not in any way copy the head notes of the plaintiff-appellants; and that the defendant-respondents shall also not copy the footnotes and editorial notes appearing in the journal of the plaintiff-appellants.
It is further directed by us that the defendant-respondents shall not use the paragraphs made by the appellants in their copy-edited version for internal references and their editor’s judgment regarding the opinions expressed by the Judges by using phrases like `concurring’, `partly dissenting’, etc. on the basis of reported judgments in SCC.”
With relation to the issue of whether copy – edited judgments were entitled to copyright protection it was decided that the judgments of a Court are in the public domain and therefore no copyright can be claimed on the same.
“To secure a copyright for the judgments delivered by the court, it is necessary that the labour, skill and capital invested should be sufficient to communicate or impart to the judgment printed in SCC some quality or character which the original judgment does not possess and which differentiates the original judgment from the printed one.”
The last and most interesting aspect of the judgment lies in the introduction of the notion of “flavour of minimum requirement of creativity” being required with regard to derivative works. In my opinion with this phrase there is an attempt to reconcile the sweat of the brow doctrine with the notion of modicum of creativity, and therefore the standard of creativity required seems to be placed rather vaguely on a middle ground between the two doctrines.
“To support copyright, there must be some substantive variation and not merely a trivial variation, not the variation of the type where limited ways/unique of expression available and an author selects one of them which can be said to be a garden variety. Novelty or invention or innovative idea is not the requirement for protection of copyright but it does require minimal degree of creativity.”
“The derivative work produced by the author must have some distinguishable features and flavour to raw text of the judgments delivered by the court. The trivial variation or inputs put in the judgment would not satisfy the test of copyright of an author.”
However, from the paragraphs quoted above I sense a lack of certainty with regard to the degree of originality required – the ambiguous nature of the terms “flavour” and “substantive variation” seem to leave the Courts with an exit option in terms of allowing interpretation which could tend towards either of the doctrines of originality.
Amongst the things which set this judgment apart is the Supreme Court’s deliberate inclusion of creativity into Copyright jurisprudence which has so far devotedly followed the English “sweat of the brow” approach. The High Court wasn’t as bold instead basing its decision on the nature of judgments as documents in the public domain, as well as tools for public utility and the triviality of the corrections made. However it must be seen to what extent the Court is willing to take its “flavour” concept. Considering “modicum of creativity” finds its basis in the American Constitution where will we locate the import of this principle in our own laws?
Secondly, although limited to judgments, this decision with its predecessor CCH Canadian v. Law Society of Upper Canada marks a trend amongst commonwealth countries to move towards embracing the principles underlying the Fiest decision, in the process overturning nearly a century of precedent starting with Walter v. Lane. Whether this inclination leads to the adoption of more American principles into IP laws in commonwealth nations will have to be seen.
In my opinion this progression is not so much a shift between two doctrines as a logical advance in the evolution of the apperception of originality. Examining Walter v. Lane in context of the year of the decision, we see that in 1900 technology was at a stage where the ability to copy a speech verbatim was considered a job that deserved copyright protection – an idea which is laughable today. Thus logically as technology makes collecting and editing raw data easier the degree of protection afforded to it, should be reduced so as not to create unfair monopolies on knowledge which defeat the purpose of copyright law.
Especially as I believe the insistence placed on the principle that where there is common source the person relying on it must prove that he actually went to the common source from where he borrowed the material, employing his own skill, labour and brain did not copy imposes unnecessary hardship and enforces needless control on the flow of knowledge and information dissemination.
Thirdly, what impact will this trend have on Section 2 (o) of the Copyright Act which says that compilations (also derivative works) are to be considered as literary works?
In addition keeping in mind the fact that copyright law is closely connected with commercial implications the induction of a “flavour of minimum requirement of creativity” poses as a massive economic concern for those dependent on data compilations. Thus before denying all derivative works which lack requisite flavor copyright protection perhaps the sui generis rights granted to databases in the E.U. can be considered for the Indian scenario as well.
Finally I have to say that the decision is brimming with potential to finally close the originality debate in copyright jurisprudence with a majority of countries opting for a requisite measure of creativity. The impact on database owners and creators of derivative works is something to watch out for though. Moreover it is to be seen whether the Courts expand the scope of this “flavour” requirement - the current judgment has stated it so hesitantly as to make it nearly impossible to apply without some kind of clarification. "
SpicyIP Jobs
NATIONAL INNOVATION FOUNDATION
National Innovation Foundation (NIF), based at Ahmedabad, has been constituted as an autonomous registered society in February 2000 supported by the Department of Science and Technology, Government of India. Applications are invited for following posts :
- Chief Innovation Officer (CIO/CEO)
- National Coordinator–Intellectual Property Rights (NC-IPR)
- National Coordinator–Scouting & Documentation (NC-S&D)
- Finance-cum-Administrative Officer (F&AO)
- Innovation Officers at various levels and different functions (Scouting and Documentation; Value addition, Research & Development; Businesses Development; Communication; Media; Database Design; Computer Application; Finance; Management Information System)
- Research Associates
How to Apply: Application with a detailed CV, passport size photograph, sample of work/reports and a note explaining the suitability for the post applied for should reach: The Executive Vice Chairperson, National Innovation Foundation, PO Box - 15051 Ahmedabad-380015 or mail at: jobs@nifindia.org . Please do reflect the selected position applied for in the subject line.
please http://www.nif.org.in/openings for more information.
Are Indian Court Judgments Copyrightable?
The real issue before the court was: how much of work ought one to do to on such "raw" judgments to make them copyrightable? Will mere copy-editing (the mere correction of clerical errors or syntax) in the judgment suffice?
The facts of Eastern Book Company & Ors vs D.B. Modak & Anr (Civil Appeal No. 6472 of 2004) are as below:
Eastern Book Company (EBC) is a leading publishers of law reports/journals in India. One such publication is a law report titled “Supreme Court Cases” (“SCC”), containing all Supreme Court judgments. Raw judgments are copy-edited by a team of assistant staff and various inputs are put in the judgments and orders to make them user friendly. These include an addition of cross-references, standardization or formatting of the text, paragraph numbering, verification and by putting other inputs.
The appellants also prepare the headnotes comprising of two portions, the short note consisting of catch/lead words written in bold; and the long note, which is comprised of a brief discussion of the facts and the relevant extracts from the judgments and orders of the Court. EBC argues that the preparation of the headnotes and putting the various inputs in the raw text of the judgments and orders received from the Supreme Court Registry require considerable amount of skill, labour and expertise and a lot of effort and expenditure.
Therefore, "SCC" constitutes an `original literary work’ of the appellants in which copyright subsists under Section 13 of the Copyright Act, 1957 and EBC alone has the exclusive right to make printed as well as electronic copies of the same under Section 14 of the Act.
EBC alleges that two defendants (Spectrum Business Support Ltd and Regent Data Tech Pvt Ltd) market software packages that infringe EBC's copyright in SCC. Sprectrum markets “Grand Jurix” (published on CD-ROMs) and Regent Data Tech Pvt. Ltd markets “The Laws” (again on CD-ROMs). As per EBC, all the modules in the defendants’ software packages have been lifted verbatim from the SCC.
In particular, EBC alleged that the defendants' have copied EBC's sequencing, selection and arrangement of the cases coupled with the entire text of copy-edited judgments as published in SCC, along with and including the style and formatting, the copy-editing paragraph numbers, footnote numbers, cross-references, etc.
Interestingly, the court adopted the "minimal degree of creativity" as the threshold for copyright protection. Deploying such a standard, the court held that mere copy editing would not suffice, as this involved mere labour and nothing else. However, since there is some creativity involved in the making of headnotes, such headnotes would qualify for copyright protection. (Incidentally, Mr Surendra Malik, the owner of EBC writes the headnotes himself! I had the great pleasure of studying with his son, Sumeet Malik in law school. Sumeet joined his dad at the EBC, after a stint at the Franklin Pearce Law Center [FPLC], a school reputed for its IP program. Sumeet was the one who alerted me to this and asked me as to what SpicyIP thought of this judgment).
Unsurprisingly, the judgment of the court rambles on for 100 odd pages, with the court religiously reproducing arguments of counsel and the various case law that they cite. The real crux of the decision is only about 4 pages!! This seems to have become a way of life for our judiciary, with none of them paying any heed to the great bard who pleaded that "brevity was the soul of wit".
We have a guest post on this judgment from Yashaswani, an outstanding student of NALSAR, that I will post soon. For the moment, I just wanted to point out one inconsistency in the court's judgment. The Court appears to endorse a standard enunciated in a recent Canadian Supreme Court case (CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 (1) SCR 339 (Canada). This case strikes a "middle path" between the two extreme doctrines enunciated by courts (in the US and elsewhere) to explain as to when a work can be considered "original" enough to merit copyright protection.
At one extreme lies the "sweat of the brow" approach to originality, which the Canadian court held as too low a standard. Such a standard (which entitles anyone expending "labour" and "capital" to claim copyright protection) shifts the balance of copyright protection too far in favour of the owner, and fails to allow copyright to protect the public’s interest in maximizing the production and dissemination of intellectual works. At the other extreme, we have the "creativity" standard, which implies that something must be novel or non-obvious - concepts more properly associated with patent law than copyright law.
The court therefore adopted a "middle path" approach by enunciating an "excercise of skill and judgment" standard. In essence, the court held that to claim copyright in a compilation, the author must produce a material with "exercise of his skill and judgment" which may not be creativity in the sense that it is not novel or non-obvious, but at the same time it is not the product of merely labour and capital. (Readers will know that SpicyIP is a huge fan of such "middle path" standards and we've tried to incorporate this Buddhist wisdom in some of the issues relating to pharma patents).
The Indian Supreme Court endorses the above standard of the Canadian Supreme Court (that the appropriate standard is neither one of "sweat of the brow" nor of "creativity") and holds that:
"Creative works by definition are original and are protected by copyright, but creativity is not required in order to render a work original. The original work should be the product of an exercise of skill and judgment and it is a workable yet fair standard"
Yet, a few paragraphs later, the Indian Supreme Court notes:
"“novelty or invention or innovative idea is not the requirement for protection of copyright but it does require minimal degree of creativity.”!!
Under such a standard, the court held that mere copy-editing (clerical corrections, syntax etc) wouldn't qualify as they did not involve "creativity", but skill expended in writing head-notes, footnotes and editorial notes would qualify. The Supreme Court therefore “restrained the respondents from copying head notes, footnotes and editorial notes appearing in their law journals.”
An earlier SpicyIP tidbit by Prashant Reddy covered this case in short. I had also referred to this case in passing in one of my previous posts.
USPTO Rejects Gilead's Patents Covering Key HIV Drugs
As part of its requests, PUBPAT submitted prior art that the Patent Office did not review before granting the patents to Gilead. PUBPAT also explained how the submitted prior art invalidates the patents and asked that the Patent Office undertake a review and revoke them. In July 2007, the Patent Office granted each of PUBPAT's requests and ordered reexamination of all four patents. In December 2007 and January 2008, the Patent Office rejected all of the claims of each of the patents.
See the PUBPAT website here. See also IMAK and Sandeep's blog for more details.
Gilead now has an opportunity to respond to the USPTO's Orders. But while we wait to hear of the outcome, this "non final" rejection will certainly have ramifications for Gilead's patent applications in India (2076/DEL/1997 and 896/DEL/2002), that have been opposed by IMAK.
Interestingly, CIPLA which is in the thick of the Tarceva litigation has opposed the Gilead patents in India. The Financial Express reports that if the Gilead patents are denied in India, CIPLA would be a major gainer. See here for article, which we've reproduced below:
"The US Patent and Trademark Office’s (USPTO) rejection of Gilead Sciences’ patent application for the AIDS drug, Viread, is expected to have a strong impact in the Indian as well as global HIV/AIDS drug market. The rejection may affect the decision of the Indian Patent Office on Gilead’s patent application for Viread here. Last year, Cipla had filed a pre-grant opposition with the Indian patent office against Viread, the much sought after second line AIDS drug, arguing that the grant of the patent in India will make the HIV drug unaffordable to patients worldwide.
On Wednesday, USPTO rejected four patents on Viread, claiming the molecules are known. But the ruling is not final and Gilead claims that the patents will be upheld. “Now, since the patent application is rejected in the US, chances for the application getting rejected in India become high and Gilead will be forced to withdraw the application,” a patent attorney told FE.
According to analysts, Cipla will be benefited from the verdict. Cipla is marketing a generic version of tenofovir at a cost of $700 per person per year in India, while Gilead’s tenofovir costs $5,718 per patient per year in developing countries. However, Cipla officials refused to comment citing that the matter was sub judice.
Last year, Gilead signed license agreements with 11 Indian Companies for manufacturing and selling Viread in 95 countries, including India. Cipla, which refused Gilead’s licensing offer, challenged Viread’s validity by filing a pre grant opposition, apart from Delhi Network of Positive People, an NGO. However, Indian firms who entered into agreements with Gilead remain unfazed by the verdict. MM Srinivas Reddy, director, marketing, Hetero Drugs, told FE, “We are not worried at all over the verdict. Gilead has the chance to go for further appeal. Let the final verdict come.”
Gilead sells tenofovir alone and in combination with other drugs like Truvada and Atripla. Taken together, the three HIV treatments generated $3.1 billion in sales last year, according to the company reports."
Saturday, January 26, 2008
Roche vs CIPLA: Businessworld Article
Launch First, Fight Later
"The Delhi high court is currently hearing a high-profile patents lawsuit that has the potential to change the rules of the game in India. In a first, Mumbai-based drug maker Cipla has launched a copycat or generic version of a drug with the full knowledge that the original has been patented in India. The product is lung cancer drug erlotinib marketed here by Switzerland’s F. Hoffmann-La Roche under the brand name Tarceva. Last week, Roche claimed patent infringement and asked the court to restrain Cipla from hawking its copies. Cipla, media reports say, will use the opportunity to prove in court that Roche’s patent should not have been granted in the first place. At Rs 1,600 a tablet, Cipla’s drug costs a third of Tarceva.
So far, companies or other entities like non-governmental organisations have opposed patents in two ways. One is by objecting to a patent application when it is being examined in the Indian Patent Office. Called ‘pre-grant opposition’, this is allowed under India’s patent laws. Over a hundred such oppositions are being made and heard. Some drugs on which patents have been challenged pre-grant are AstraZeneca’s cholesterol reducer Crestor (opposed by Ahmedabad’s Torrent Pharmaceuticals) Eli Lilly’s Cialis (opposed by Mumbai’s Ajanta Pharma), and Pfizer’s anti-fungal Vfend (opposed by Gurgaon’s Ranbaxy Laboratories).
Second, the Indian patent law also allows opposition to a patent after it has been granted. This is called ‘post-grant’ opposition. Mumbai-based drug company Wockhardt, for instance, objected to a different Roche patent — on the hepatitis C drug Pegasys — in the patent office, after it had been granted. In a broad sense that is what Cipla is doing — opposing a patent ‘post-grant’. But Cipla has chosen a far more provocative, and Roche’s lawyers argue illegal, route. It has first launched its copycat thus courting a lawsuit, and will now argue its case of patent invalidation before a court of law. Roche and Cipla refused to comment on the case since it is sub judice. However, Amar Lulla, joint managing director of Cipla, confirmed to BW that it had launched erlotinib a few weeks ago. “It is available with the trade,” he said.
Cipla has supporters. “There is nothing remotely improper about Cipla preparing to launch a generic if it has concluded that Roche’s patent is invalid,” says Frederick Abbott, professor of international law at the Florida State University College of Law. “Patents create a legal presumption in favour of the patent holder, but they remain susceptible to challenge and invalidation. That is the way the patent system is designed,” he says. Abbott was adviser to the South African government in a famous lawsuit brou- ght by 39 multinationals against the country’s patent laws. It was eventually dropped.
But some believe that Cipla has weakened its hand. By not opposing the patent through the usual channels, and directly launching its copy, it may convey the impression that “it does not respect the law”, says Shamnad Basheer, a New Delhi-based associate of the Oxford Intellectual Property Research Centre who runs a popular blog on patents. “This infringement strategy might backfire against them in court.” Basheer points out that Cipla does not seem to have approached the patents office with its opposition prior to this. Nor has it sought a licence, such as rival Natco Pharma of Hyderabad, from Roche in exchange for royalty payments. At the time of writing, the court had yet to finish hearing the case though proceedings began last week.
Cipla’s audacious move has doubtless caused consternation among companies who hold patents or have applications pending. The question on everyone’s mind is if Cipla get its way, will it open the floodgates?"
Roche vs CIPLA: The Law on Temporary Injunctions
For those interested, relevant extracts from this judgment of Ramamurthy J is posted below:
"The plaintiff is a manufacturer and dealer engaged in the sale of ploughs and plough shares know as "Bose ploughs" or "plough shares" and the plaintiff's case is that in the course of the business he has been experimenting and inventing new patterns of ploughs as a result of his inventive genius and prolonged research and that he obtained a patent on 12-10-1960 in respect of a particular pattern of plough, having a special twist distinguishing his pattern from the other ploughs in the market. The plaintiff's case was that he commenced production and sale of this particular type of plough from October 1962, that about March 1964, the defendant slavishly imitated the plaintiff's pattern by manufacturing ploughs and selling the same in the market.
The defendant resisted the claim on the ground that the plaintiff cannot claim any inventive genius or special research in the particular pattern of plough which he was manufacturing having regard to the prior public knowledge and obviousness arising from the manufacture and sale of ploughs long before the manufacture and sale of ploughs long before the controversy arose. The defendant claimed that he has been manufacturing ploughs of various patterns form the year 1958, and that the particular pattern, "No. 99 Star master" which is complained of as an infringement is not any imitation of the plaintiff's pattern, but it is as a result of the defendant's invention and improvement upon the patterns of ploughs which he had been manufacturing and selling.
Principles regulating the grant of an interim injunction in a suit complaining of infringement of a patent are fairly well settled. The plaintiff must make out a strong prima facie case for the issue of a temporary injunction. An interim injunction will not be granted if the patent which has been obtained by the plaintiff is a recent one and there is a serious controversy about the validity of the grant of the patent itself. In other words, if from the objections raised by the defendant it is clear that that a serious controversy exists as to whether or not the invention claimed by the plaintiff is a new one or a new manufacture of whether or not the invention involves any new inventive skill having regard to what was known or used prior to the date of the patent, courts will not grant an interim injunction restraining the defendant from pursuing his normal business activity. An interim injunction will not be granted if the defendant disputes the validity of the grant. The facts of the instant case disclose a bona fide tribal issue as regards the inventive genius claimed by the plaintiff. If the patent is new and its validity has not been established in a judicial proceeding till then, and if it is endeavoured to be shown that he patent ought not to have been granted under the provisions of S. 26 of the Patents and Designs Act, 1911, the court will not interfere by issuing a temporary injunction.
In the instant case every circumstance that has been made out is definitely against the grant of a temporary injunction. The plaintiff has not made out the important condition of a strong prima facie though the defendant raised this particular objection, the plaintiff has not placed any prima facie material or any evidence by production of account books, bill books etc. to show the date of his commencement of the production and the nature of the sales extensive or otherwise. On his own showing he commenced production only in October 1962, and the suit is filed in 1964 April. Yet no materials have been placed.
Secondly, the patent is very recent one, and I find that the decisions have uniformly taken the view that any patent which is less that six years old is regarded as a recent one. The statement of the law in Terrel on Patent, 9th Edn pages 318-320 shows that a patentee should show undistributed possession of the enjoyment of the patent at least for a period of six years before the controversy arose. In Boots Pure Drug and Co., (India) Ltd. v. May and Baker Ltd., 52 Cal WN 253, this rule hat there should be proof of actual user of the patent for more than six years was applied in India. Thirdly there is also a serious controversy about the validity of the grant of the patent touching the originality or the inventive genius of the plaintiff or as to how far the prior knowledge holding the field would disentitle the plaintiff to the grant of the patent. The defendant is certainly not a new entrant in the field but he has himself been a dealer, manufacturer and seller of ploughs of various patterns. For all these reasons I entirely agree with the order of the learned District Judge holding that the plaintiff has not made out any case for the grant of an interim injunction."
Bollywood and Online Piracy
In my view however this website counters only one of the many reasons for piracy. Piracy usually occurs because of price differentials between the original content and the pirated content. Such piracy is effectively countered by effective pricing strategies such as those adopted by Moser-Baer. The present website still charges about $5 per download because of which a viewer may still prefer a Rs. 30 pirated CD unless he had a fast internet connection and can view the movie for free. However this website very effectively counters the second reason for piracy which is a market failure due to the complete lack of a distribution network for the copyrighted content i.e. viewers maybe ready to buy copyrighted content but are unable to because the particular content is not being sold to them. I’m guessing that this maybe a problem especially in the overseas market which have a huge market for pirated Bollywood VCDs. As a newreport puts it “Barjatya explains that travelling in Finland in 2006, he realised that while the marketing of his film reached there, the movie didn’t, which meant the people had to consume it illegally.” By offering this service for a reasonable price over the internet this website may be able to counter the piracy problem in the overseas market. This same model however will probably have mixed results in India since internet penetration is poor and broadband penetration is poorer.
Other production houses like Eros International have entered into licensing agreements with You Tube to allow for viewing of promotional videos and clips of their movies. The best part of this strategy is that Eros will be making money through marketing instead of spending money on marketing i.e. You Tube will be sharing ad-revenues with Eros for all its uploaded content.
Roche vs CIPLA: Some Dates
"Indian Patent Application No. 537/DEL/1996 A filed on 13th March, 1996 has been granted as 196774 and published on 13th July, 2007 in the Official Journal Of The Patent Office. The above Application in India which led to the grant of a patent has priority date of 30th March, 1995. The priority document for the Indian Application is US 08/413,300 filed on 30th March, 1995, through the publication in the Official Journal of the Patent Office does not specify the priority document.
We would expand the events as follows.
Original US Application (first priority document) US 08/413,300 has been filed on 30th March, 1995. The priority document is mentioned in bracket as CIP (Continuation-In-Part). However, no record of the US priority document is available.
Based on the US Priority document US 08/413,300, a PCT International Application was filed at the International Bureau as PCT Application no. PCT/IB95/00436 on 6th June, 1995. The PCT application was published as WO/1996/30347 on 3rd October, 1996.
Based on PCT/IB95/00436, a US Application was filed on 28th May, 1996 having Application no. 653,786.
Based on US Application no. 653,786 dated 28th May, 1996, US Patent no. 5,747,498 was granted on 5th May, 1998.
The Indian Patent Application is filed on 13th March, 1996 having a priority of 30th March, 1995 (however, not mentioning in the Official Journal of the Patent Office of any other priority data as such priority document).
It is however surprising that the contents of the priority document no. US 08/413,300 is not available anywhere including in the WIPO, US and other sites. It maybe worthwhile to locate priority document which is mentioned as CIP and only referred to as the priority date in the Indian Application.
The relevant (or irrelevance?) of the priority date (30th March, 2005) is that the prority date claimed in Gefitinib application by Astra (841/DEL/1996) is 27th April, 1995. It is therefore important to verify the existence or filing of the Priority document (US 08/413,300) having priority date of 30th March, 2005."
Varun Chhonkar of the popular Patent Circle blog has written to let us as below:
"There is a correction regarding Erlotinib patent details as posted on SpicyIP taken from Sandeep Rathod's Blog.
The Indian Patent No. 196774 for Erlotinib hydrochloride issued against mail-box application No. 537/DEL/1996 was published in the Patent Office Journal dated July 13, 2007 not September 14, 2007. You can download the Patent Journal Issue No. 28/2007 and scroll down to check the details. Also, I pasted the details below for your reference. Please correct the date as it is crucial date used for calculating valid period for filing a post-grant opposition."
We thank Dr Nair and Varun immensely for sending us useful facts and for helping further our cause of "accurate reporting".
Roche vs CIPLA: Pricing Issues
Does anyone know what the actual pricing is in the Tarceva case? News reports such as the Hindu and the Mint state the price of Roche's drug is Rs 4800 per tablet, while CIPLA sells at Rs 1600. I've heard however that Abhishek Singhvi argued that the price of the drug is only Rs 3200 and that of this amount, 30% is the customs duty (imposed for imported drugs). In other words, without such duty, the price of Roche's drug is only Rs 2400 i.e. about Rs 800 more than CIPLA's price of Rs 1600. If this is indeed the case, then it seems to me that the price differential between the innovator drug and the generic is unusually small here. Does anyone have accurate details on the pricing? Any doctors or pharmacists or patients visiting this blog?
Girish Malhotra of Epcot International who runs a popular blog dealing with pharmaceutical manufacturing has a great post on pricing issues. In response to my post dealing with the paradoxical issue of CIPLA facing allegations of overpricing Cipro (whilst at the same time attacking Roche over their excessive pricing), he writes:
"Ciprofloxacin in India (250 mg) sells for Rs. 5.00 per tablet compared to more than a dollar in US. Based on what I can estimate, selling price of 250 mg tablet out the Cipla or Ranbaxy or Matrix door should be about no more than Rs. 1.00 to 1.50 per tablet. I do not know what would be the distributor mark-up.
On the Roche case, pricing is very simple and influenced by two factors. 1) The process conversion efficiency is low and it adds to the manufacturing cost. 2) Since the drug is effective and no one wants to die on their will, they will pay whatever will extend the life. Using this as the basis, drug companies will charge whatever one can they can get. If people are willing to pay 2 lakhs, that would be the price. "
Friday, January 25, 2008
Roche vs CIPLA: Update: The Law on Temporary Injunctions
After the hearing on the 31st, the judge is likely to reserve judgment--so we may see an order only by the first or second week of February. MoneyControl's Vikas Dandekar carries an interesting update on this case here.
Those of you following the case closely will know that section 3(d) is a major bone of contention in this case as well. CIPLA argues that the Tarceva (Erlotinib) patent does not demonstrate how it is more efficacious than an earlier known compound (Gefatinib). So with the Gleevec case and the Tarceva case reaching the courts, we will finally have some clue on how section 3(d), India's unique patent section is to be interpreted.
What does "efficacy" mean? Does it mean "therapeutic efficacy" or will it be wider to encompass any other kind of advantage or surprising result (eg. heat stability etc) Also, what is the level of proof required for demonstrating efficacy? Will the fact that this provision was blindly lifted from a European Drug Regulatory Directive cause the courts/patent office to interpret it in a drug regulatory sense i.e. the patent office would insist on "clinical trial" to demonstrate that the drug is more efficacious. As one can appreciate, such proof will run completely antithetical to the very rationale of patents--i.e. to incentivise early disclosure. Clinical trial data etc is generated many years after a molecule is discovered. Also, the patent application itself my run the risk of falling foul of the novelty test--since trials etc were conducted and the substance is known to the public (unless of course, we construe this as "secret use" or "experimental use" and therefore "novel"). Whilst interpreting section 3(d), one has also to bear in mind that it is a double edged sword. In an attempt to keep out the bad MNC's, a hike in the standards could also impact the applications filed by our home grown Indian companies. Under such a heightened standard, will Ranbaxy's CIPRO O-D (once a day) gain protection?
Back to the Tarceva litigation. The case law on the grant of temporary injunctions in patent matters is very interesting. There are more than 10 cases that seem to suggest that the moment a defendant counterclaims invalidity, the court cannot grant a temporary injunction. Particularly, when the patent is a recently granted one. Illustratively, see Manicka Thevar v Star Plough Works AIR 1965 Madras 327. See also the Bilcare case which has been extensively discussed on this blog.
Interestingly, even in the Novartis EMR case (Norvatis AG and Anr. v. Mehar Pharma and Anr. 2005 PTC 160, para 28), since the defendants challenged the validity of the recent EMR grant to Novartis, the court held in favour of the Defendants and did not grant an injunction. The Court held that the balance of convenience lay in the defendants favour, as the drug was a life saving one and the plaintiffs did not manufacture the drug in India, but imported it.
Reading the cases, the non grant of a temporary injunction seems an almost automatic rule. Which essentially means that in India, one can never get a temporary injunction in a patent matter!! (since in almost all such matters, the defendants would always counterclaim invalidity). However, they're some 3 odd cases (eg. Telemecanique vs Schneider) where such injunctions have been granted. I'm not sure which way the judge will go. But here are some thoughts/predictions:
1. Most of the cases where the injunction was denied (on account of an invalidity attack) were cases where either the "opposition" mechanism was exhausted or where none was filed. In the Tarceva case, the post grant window is still open. And the judge may well insist upon CIPLA filing such opposition--till the time the opposition is decided, the judge may injunct CIPLA.
2. CIPLA's statements in the press that it will outrightly infringe may weigh against CIPLA here.
3. I haven't studied the "validity" issue in detail, but my sense is that unless Roche submits some really concrete evidence demonstrating how Erlotinib is increasingly efficacious over Gefatinib, they will lose on section 3(d).
We have to wait and watch to see how this patent litigation that will set the tone for future pharma cases in India turns out.... We're interested in hearing what our readers have to say in the way of crystal ball gazing--which way do you think the courts will go? We can perhaps replicate a jury like situation and get some votes here!!
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