An Introduction to the recent Frontline issue on Indian Patent Law

Frontline, in a series of articles its recent issue, discussed the recent developments in Indian Patent Law and its reverberations in the pharmaceutical industry and public health [ ‘Patent to plunder’ by Amit Sengupta, ‘A big step forward’ by C.P. Chandrasekhar, ‘Patents and the law’ by V. Venkatesan, ‘A welcome first’ by T.K. Rajalakshmi, ‘Western warnings’ by R. Ramachandran, ‘Question of efficacy’ by Leena Menghaney, ‘The current patent system is deeply flawed’, interview with Prof. Shamnad Basheer and ‘Drug and duplicity’ by Brook K. Baker]. In this post, I intend to introduce you all to some of the issues highlighted in the issue. If time permits, I shall analyse all or some of the articles in the later posts.

The articles inter alia examined the Novartis patent dispute and the recent grant of first Compulsory Licence (“CL”). The articles traced the Novartis patent dispute touching upon the patent office decision, IPAB decision, the Madras High Court judgment and the pending SLP before SC. [The patent dispute is discussed in several posts.]

The article ‘Patent to plunder’ compared the prices of Glivec and generic version viz., INR 1,20,000 and INR 8,000 respectively and tried to undermine the claims of altruism of Novartis. The article also examined the ramifications of dilution of threshold in Section 3(d).  V. Venkatesan in ‘Patents and the law’ contended that Section 3(d) had been critical in filtering out frivolous patent claims. Leena Menghaney, in ‘Question of efficacy’, pointed out that  a high threshold for “efficacy” test under Section 3(d) and the inventive step, was crucial for ensuring access to generic medicines. 

In the context of his written submission to the Supreme Court in the Novartis case, Prof. Shamnad Basheer, in his interview, opined that the Madras High Court was correct in interpreting “efficacy” to mean therapeutic efficacy even though its reasoning could have been stronger. Relying on Section 3(d) and parliamentary history, he stated that he presented stronger grounds before the Supreme Court for reliance on therapeutic efficacy as the appropriate standard.

Venkatesan in ‘Patents and the law’ pointed out that the opposition mechanisms under the Patent Act, 1970 were underutilized. Prof. Basheer agreed with the aforesaid view and opined in his interview that a vibrant opposition mechanism could ensure adherence to the high standards under the Patents Act, 1970.

The articles discussed the first Compulsory Licence (CL) issued by the Indian patent office to the Indian generic drug company Natco Pharma Ltd for Bayer's anti-cancer drug sorafenib. [The issue of first CL is discussed here.] It was noted that the Bayer's version of the drug which costed INR 2,80,000 for a patient a month could be made available at INR 8,800 a month. 

C.P. Chandrasekhar, in ‘A big step forward’ noted that the grounds on which the Controller of Patents accepted Natco's application and rejected Bayer's opposition were path-breaking. Referring to the fact that some of the developed countries had in the past resorted to CL, he contended that the ideology and international pressure delayed the use of CL provision in India.

‘Western warnings’ by R. Ramachandran examined the external reactions particularly that of Pharmaceutical Research and Manufacturers of America (“PhRMA”) to the recent issue of CL. It refuted PhRMA's criticisms on the recent issue of CL and noted that the decision was in full compliance with the Doha “Declaration on the TRIPS Agreement and Public Health” of November 2001 and Article 31 of TRIPS.

T.K. Rajalakshmi, in ‘A welcome first’, examined voluntary licensing which was suggested as an alternative to CL. Referring to those who have expertise in this area, it was argued that the compliance level on voluntary licensing was abysmal. The article, on the other hand, cited the anthrax scare in the U.S., where the government threatened to issue CL and thereby, ensured a reduced price. It also refuted PhRMA’s contention by citing the discretion enjoyed by a country in treating price as a determinant factor for issue of CL. 

Prof.Basheer, in his interview, opined that there was no empirical work demonstrating any adverse effect on innovation by CLs. On the other hand, there were a few studies such as study conducted by Colleen Chien which indicated that licences did not have any significant demonstrable effect on the rate and pace of innovation. Prof.Basheer, further, noted that some of the successful extant innovators benefited from the lax IP regimes in the past. 

Prof. Basheer reminded that a CL was not an evisceration of the patent.  The patentee, who continued to hold the patent, was entitled to a reasonable royalty from every new player entering the market. A CL might permit an innovator to profit from newer, untapped markets with generic entrants to such markets. He believed that the extant law on CL was unsatisfactory as it gave scope for patentees to strategically delay the proceedings and frustrate the applications. 

Leena Menghaney, in ‘Question of efficacy’, highlighted the possibility of a new patent model that routinely allowed low-cost alternatives in lieu of royalty payments which helped the originators to recoup their development costs and at the same time ensured access to medicines for the people in the developing world.

Brook K. Baker, in ‘Drug and duplicity’, criticised Novartis on its position on CL and Section 3(d). According to him, even though it issued pious statements in the past about its benign intentions with respect to the use of lawful TRIPS flexibilities, it sought to strengthen and lengthen patent monopolies and preclude India from using TRIPS flexibilities to its advantage.