Tuesday, October 18, 2005

"Breaking Patents"

The drug oseltamivir patented by the Swiss pharmaceutical giant, Roche under the trade name Tamiflu, has the potential to become the most sought-after drug of recent times. All will now depend on the magnitude to which avian flu will spread. Panic symptoms are already in place with the U.S. Department of Health and Human Services procuring 12.3 millions of Tamiflu from Roche. On its part, Roche has also indicated that it would be increasing the production of the drug eight times the current output.

Cipla, which had donned the role of robin hood in the HIV drugs episode has once again proclaimed that it would not hesitate to bring out generic version of the patented drug. It had also expressed its willingness to fight legal battles in Indian courts on this account. The Tamiflu patent was filed in the Indian Patent Office on February 26, 1995 months after the new regime on patent was put into place. Cipla hopes that the Indian government would break the patent in the wake of a national health emergency.

There are legal provisions in the domestic patent laws of almost all countries to take care of public health requirements. The measures can amount either to cancellation of the concerned patent whereby generic companies will be free to bring in cheaper versions of the patented drug or force the patent holder to license the product to competitors.

Saturday, October 08, 2005

Biotechnology and IPRs: Proprietary Rights on Life Forms

This article was published in Pharmabiz on Wednesday, May 18, 2005.

Biotechnology holds much promise for the agriculture and pharmaceutical industries. The recent efforts on regulating biotechnology should aim at giving the right impetus to this nascent technology, which has the potential to solve problems pertaining to food production, health and environment. World over, biotechnological inventions have enjoyed some form of protection by Intellectual Property Rights (IPRs). The choice of the form of protection for these inventions, have been a cause of much debate. The issues of morality and ethics have also hampered consensus in multilateral agreements.

Protection in the form of IPRs has, more often, revolved around the issue of equity. The developing countries have repeated accused foreign multinational companies for pirating and patenting biological material, which forms a part of their traditional knowledge and for not sharing the profits or the technology involved. The Convention of Biological Diversity attempts to remedy this situation.

With regard to biotechnology, its application can be studied from two viewpoints - (1) the way it affects the use of biotechnology in industry and (2) the application of biotechnology in agriculture. As for the former, the application pertains to chemical and medicinal substances derived from plants and animals. An apt illustration would be the commercial manufacture of anti-venom serum. Its application in agriculture concerns the use of genetic engineering in producing new plant and animal varieties. For example, rice varieties like IR8, which have superior qualities than naturally existing varieties can be developed using biotechnology.

Protection under TRIPS

The issue of providing patents for living organisms prevailed during the Uruguay
Round of negotiations as a standoff between US and other nations including the EU. US favoured a comprehensive policy that anything expect human beings, can be patented. Other nations did not reflect this sentiment. Resultantly, the WTO members agreed on a minimal protection for plant varieties, subject to review, in Article 27.3(b) of the TRIPS agreement. Paragraph 19 of the 2001 Doha Declaration has broadened the discussion under the Article to include biological diversity, the protection of traditional knowledge and folklore.

Article 27 excludes plants and animals from patentability. It also excludes biological processes for the production of plants or animals. However, the TRIPS Agreement does allow patents for microorganisms and non-biological and microbiological processes. It also provides for the protection of plant varieties either by patents or by an effective sui generis (a special regime that falls outside the traditional IPRs) system or a combination of both.
The minimal agreement reached by the member countries on 'plant and animal varieties' reflects Art 53(b) of the European Patent Convention (EPC) in its content. But, the exclusion of 'plants and animals' in article 27.3(b) of the TRIPS is broader than the 'plant and animal varieties' contained in the EPC. Cautiously, India has extended the exclusion from patentability to "plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals" by section 3(j) of the Patents Act, 1970.

Life forms as 'invention'

Intellectual property protection for life forms have been riddled with many perplexing technical issues. The prerequisites for granting a patent, i.e., novelty and non-obviousness, are difficult to prove in the case of living organisms. In most countries, the test of novelty is satisfied if the biotechnological invention does not exist is the prior art (things already known). The requirement of inventive step is met if there is certain level of technical intervention by man. In addition to these prerequisites, plant varieties have to be 'distinct', i.e., the traits should be distinct from earlier varieties. Moreover, biotechnological inventions, compared to mechanical inventions, are difficult to replicate as they are reproduced sexually.

Thus, having excluded plants from patent protection, as a trade-off, India had to provide an effective sui generis system in place for the protection of new plant varieties. This was achieved with the passing of the Protection of Plant Varieties and Farmers' Rights Act, 2001 ("Act").

Sui generis protection

The sui generis system which evolved as a weaker form of protection than patents, was first recognised internationally by UPOV (French acronym for "International Union for the Protection of New Varieties of Plants") in 1961. The main objective of the UPOV convention, last revised in 1991, is the protection of new plant varieties by an intellectual property right. The twin freedoms of "breeders' exemption" (freedom of other breeders to use a protected variety as starting material, without prior authorisation or payment of royalty) and "farmers' privilege" (freedom of farmers to re-use saved seed of a protected variety) contained in the UPOV, have now been adapted into the Act."Breeders' exemption" is contained in section 30 of the Act which permits use of a variety by any person as an initial source of variety for the purpose of creating other varieties. "Farmers' privilege" is stated in section 39(1)(iv) of the Act, by which a farmer is entitled to save use, sow, resow, exchange, share or sell farm produce including seed of a variety protected under the Act.

Trade secret

Apart from patent and sui generis form of protection, biotechnological inventions may also be protected as trade secrets as provided for under article 39 of the TRIPS, which would enable breeders to maintain secrecy about the patent lines. This method of protection, however, does not protect the breeder against independent, bona fide discovery of the protected invention. Law and policy should encourage entrepreneurs through the grant of adequate intellectual property protection for biotechnological inventions. The Act strikes the right balance in affording adequate protection to breeders and farmers and providing access to technology for development of new varieties. The paranoia of monopolistic exploitation can be addressed better though efficacious use of competition law. Similarly, the grant of compulsory licences under the Act can take care of pubic interest issues. Contemporaneous legislation, like the Biological Diversity Act, 2002, further protects the use of biological resources and knowledge.