IPAB rejects objection by Novartis

IN AN ELABORATE order, the IPAB (Intellectual Property Appellate Board) dismissed Novartis's objection raised against the continuance of Mr S Chandrasekhar as the technical member in the Gleevec appeal. The objection was based on Mr Chandrasekhar involvement in the Novartis's application as the Controller of patents (See earlier post here). The IPAB relied on the 'doctrine of necessity' in arriving at its conclusion to continue hearing the matter. Many thanks to a resourceful colleague, Mr A Ramesh Kumar, Advocate for providing a copy of the order copy which can be found here (in as is where is condition).

IPAB’s competence-competence

By raising the issue of whether Mr Chandrasekar, the Technical Member of the IPAB can sit on appeal in a matter in which he was involved as a Controller, Novartis has put the IPAB in a fix as it now has to decide its own competence that too in its very first case. What is now raised before the IPAB is a jurisdiction issue and whichever way the IPAB, which reserved orders after hearing the parties on 10^th July 2007, decides will have a bearing on the way the institution functions in the future. While the IPAB has reserved its verdict, subject to whatever it would have to say, the following issues must be looked into.

The scheme of the Patents Act 1970 and the Patents Rules 2003 shows that the Controller acts in two capacities – acts done directly by the Controller and acts done on behalf of the Controller. First, all actions taken by the officers (examiners) shall be done under the 'superintendence and directions of the Controller such functions of the Controller under this Act as he may, from time to time by general or special order in writing, authorise them to discharge'[s 73(3)]. These actions represent delegated actions carried on behalf of the Controller. Then there are the actions carried on directly by the Controller [s 73(4), where the Controller may 'deal with such matter himself…'].

The Act and the Rules takes care to avoid conflict of interest. As per rule 56(3), an examiner who has dealt with the application for patent during the proceeding for grant of patent is made ineligible to be a member of the Opposition Board. It would be futile to argue that the examiner discharged a function of the Controller and hence the decision amounts to a decision by the Controller. Such arguments do not find a place in an Act which provides for post-grant opposition before the Controller.

Section 116(2) of the Patents Act which deals with the qualifications of the Technical Member clearly leans in favour of appointing person who has been a Controller for at least five years. That being the case, it would be quite natural for a Controller who was involved in the grant or rejection of a patent application to preside in appeal at a later point of time as a member of the IPAB. Then, the challenge, if any, must be directed to section 116 (2)(a) itself.

Book on the Law of Patents

My book “The Law of Patents – With a Special Focus on Pharmaceuticals in India” published by LexisNexis is finally out. The book is the first one of its kind to concentrate on the critical and hitherto unexplored area of pharmaceutical patents, especially in the Indian context. The book covers the general law of patents and has a special focus on pharmaceuticals. As a counsel who was involved in the Novartis-Gleevec cases (EMR, challenge to constitutional validity of section 3(d), rejection of patent application), I have tried to give a closer view on various aspects of the case. The book covers opposition proceedings in great detail (over 60 pages of commentary). There is also a separate chapter on exclusive marketing rights.

I have started a blog for the book with the hope that readers will give contribute to the development of this book. I hope to provide timely updates to the book, citing relevant paragraph numbers, on this blog. You may subscribe to the updates by entering your email id here.

Anyone who will be interested in reviewing my book may write to me here.

Read the book’s introduction here.

Read the detailed table of contents here.

Read about the book and author here.

Download order form here.

Bibliographic details: ISBN 978 81 8083 150 8. Price Rs 1595. Hardback, xliv + 1161 pages. Rupture factor: not critical.

Now you may google patents!

Google 's ever-expanding portfolio of freebies now includes Google Patent Search (Beta). You may generally search more than 7 million patents here. Those with specific needs can search here.

Reporting patent decisions

Our courts have, by force of tradition, found it habitually convenient to follow their previous decisions rendered on similar grounds. Despite the acquisitions of colour-matching, the practice had made the system predictable, and to an extent, efficient. As a system based on the doctrine of precedent, there is a great degree of trust imposed on reporting decisions of courts. There is a fairly trustworthy means of reporting decisions of the High Courts and the Supreme Court in place now. The decisions of the lower courts, being devoid of any binding effect, were never meant to make it to the reports.

Decisions concerning patents get reported when disputes are brought before the High Courts or the Supreme Court. The patent decision rendered by a Controller has a very rare chance of being reported. Out of the nearly 8000 pharmaceutical applications pending before the Patent Office, more than 150 opposition proceedings have been launched. Of the opposition decisions rendered by the Patent Office, only a few have been reported – Patent and Trademark Cases, a subscription journal has reported the decision on Wockhardt’s Nadoxin and Pharmabiz reporting the decision on Novartis’ Gleevac. You will find a summary report on some opposition proceedings here and here.

Reporting decisions of the Controller will have its own set of problems. First, these decisions can at best have persuasive effect offering guidance and cannot have any binding effect. Hence the primary incentive for reporting them is simply not there. Secondly, the humungous number of patent decisions (of rejection and grant of applications) rendered by Patent Offices the world over make it next to impossible to report them all.

Yet we find decisions of first instance being reported in an ingenious way. It has been the practice in the European Patent Office to include the decision of the first instance (Opposition Board) in its appellate decision. This form of indirect reporting serves the vital need of those who need to refer to the decision of the first instance for additional details and to get the bigger picture where needed. It will indeed be desirable for the development of patent law in this country, if the Appellate Board and the High Courts make it a point to include the decision at the first instance in their decisions.

Workshop in Delhi on Access to Affordable Medicines

Those who are interested in issues relating to access to medicines, which incidentally involves issues on Patent laws in India, will be pleased to know that Centad in collaboration with others is organizing a workshop on "Access to Affordable Medicines" on 11th November, 2006 (9 am to 12 pm) at S6, India Social Forum, Jawaharlal Nehru Stadium, New Delhi.

Is the opponent a party to the pre-grant opposition proceedings?

I have consistently canvassed a proposition, much to the chagrin of legal puritans, that an opponent in a pre-grant opposition is not a party to the proceeding. In strict legalese it means that a pre-grant opposition proceeding before the Controller is not a proceeding inter partes. Though a bare reading of section 25(1) of the Patents Act, 1970 gives an impression that pre-grant opposition proceeding is between the applicant and the opponent, the details in the Act and the Rules point to the contrary. For starters, pre-grant opposition proceedings are entertained in the application stage where third parties cannot, and need not, be regarded as essential parties to the proceeding. For the reasons stated below, pre-grant opposition procedure can at best be regarded as a procedure to take into account the case presented by an opponent who is not a party to the proceeding and nothing more.

Firstly, a pre-grant opposition, though initiated by a third party, will be regarded as an extension of the application procedure as the opposition takes place before the grant of the application. For this reason, pre-grant opposition will be treated as a proceeding involving the Controller and the applicant. The role of the opponent is merely to supply information to the Controller. In fact, the power of the Controller to revoke and amend the patent is conferred under section 15 which may be exercised even without a pre-grant opposition. In other words, the outcome of the application can be the same even without an opposition.

Secondly, a brief comparison between the procedures of pre-grant and pos-grant opposition gives an unmistakable impression the pre-grant opposition proceedings are not intended to be a proceeding between parties. Unlike post-grant opposition where an opponent becomes a party by filing his notice of opposition in Form 7, pre-grant opposition requires only a written representation and as such there is no procedure by which the opponent can officially enter into the proceedings. In a country where things become 'official' on the payment of fees to the Government, the status of an opponent remains obscure as there is no fee for filing a pre-grant opposition. Furthermore, there is no specific provision similar to rule 63 by which an opponent can be eligible for costs of opposition.

Thirdly, the mere fact that a representation is made by the opponent in pre-grant opposition will not oblige the Controller to act upon it. The opposition will be entertained only 'if the Controller is of the opinion that application for patent shall be refused or the complete specification requires amendment'. The applicant will be informed about the opposition only if the Controller, in his opinion, is satisfied about the merits of the opposition.

Fourthly, the opponent will not be entitled to know the defence of the applicant in pre-grant proceedings. Unlike the procedure for post-grant opposition, the Act and the Rules do not detail the manner in which an opponent can get information about the applicant's defence.

Finally, as argued earlier, though an applicant can prefer an appeal from the order of the Controller in pre-grant opposition proceedings, there is no corresponding right of appeal for the opponent.

Delhi workshop on pre-grant opposition

The third and final workshop in the series of sensitisation workshops on pre-grant opposition will be held in Delhi on October 19, 2006 at the Jacaranda Hall II, India Habitat Centre. The earlier workshops organised by Centad in Mumbai and Hyderabad were well represented by the experts and professionals from the pharmaceutical industry.

Once again, I have been slotted in the dreaded post-lunch session. I will speak (and try to keep every one awake till the Tea break) on “Patent Pre-grant Opposition in India” (essentially the legal aspects of pre-grant opposition under the Patents Act, 1970) in session III (14:00 hrs – 15:00).

I hope to see you there.

Can there be an appeal to the Appellate Board from the order of the Controller in pre-grant opposition proceedings?

Surprisingly, the answer is yes!

In the Seminar on Pre-grant Opposition, I heard a unanimous voice that the only remedy from the order of the Controller in pre-grant opposition proceedings is to file a writ petition as there was no provision of appeal under the Act or the Rules. Few weeks back, I had taken a different view before the Madras High Court in writ petition filed against an order of the Controller (Chennai) rejecting the patent application. In response to the writ filed challenging the order of the Controller, we had taken a plea that the writ petition cannot be maintained as the Act provided for a system of appeal against the Controller’s order in pre-grant opposition.

So, is there an appeal to the Appellate Board? The first thing that strikes you on reading section 117A of the Patents Act, 1970 is the conspicuous absence of section 25(1) – the section that deals with the grounds of pre-grant opposition. [I was also surprised by the absence of section 92A]

Sub-section (2) of section 117A reads thus –

(2) An appeal shall lie to the Appellate Board from any decision, order or direction of the Controller or Central Government under section 15, section 16, section 17, section 18, section 19, section 20, sub-sections (4) of section 25, section 28, section 51, section 54, section 57, section 60, section 61, section 63, section 66, sub-section (3) of section 69, section 78, sub-sections (1) to (5) of section 84, section 85, section 88, section 91, section 92 and section 94.

In fact, section 25(1) is not supposed to be in the above section. Section 25(1) is the counterpart of section 25(2), both of which deal with the grounds of opposition before and after the grant. As you will see, section 25(2) is not mentioned expressly in section 117A. The section that finds mention in section 117A is section 25(4). This perfectly fits into the scheme of things as the order of the Controller in post-grant opposition, pursuant to the opposition under the grounds mentioned in section 25(2), is passed under section 25(4).

Section 25 does not contain details of the order that may be passed by the Controller consequent to a pre-grant opposition. The details of that are contained in section 15. Read section 15 carefully and you will find the two things that a Controller may do with respect to an application before him. He may “refuse the application or may require the application… to be amended.” Luckily, these two options coincide with what a Controller can do consequent to a pre-grant opposition which are detailed in rule 55(5). And therein lies your right to approach the Appellate Board from an order passed in pre-grant opposition proceedings. An order passed by the Controller pursuant to pre-grant opposition is an order passed under section 15 which is a subject matter of appeal under section 117A.

Workshop on Pre-Grant Opposition Proceedings

Centad (Centre for Trade And Development in collaboration with National Academy of Legal Studies and Research (NALSAR) University of Law is organising a Workshop on Patent Pre-grant Opposition on 22 September 2006 in Hyederabad at NALSAR Law University.

I have been invited to make a presentation on Pre-grant opposition.

My session details is as follows:

1400-1500 Session III
Patent Pre-grant Opposition in India

Speaker:
Feroz Ali, Advocate, Chennai
Tahir Amin, Initiative for Medicines, Access and Knowledge (I-MAK), Bangalore

My Article published in The Hindu Business Line, also available in this blog, serves as the background paper for this seminar.

Patent for nimesulide preparation refused on Panacea's pre-grant objection

This article was published in Pharmabiz on Wednesday, July 19, 2006.

Stoplik Services India Pvt Ltd filed an application for Patent No. 183458 (454/BOM/1998 dated 14.07.1998) for "A process for the preparation of a therapeutic anti-inflammatory and analgesic composition containing nimesulide for use transdermally". The said application was opposed by Panacea Biotec Ltd which filed a notice of opposition on Feb 1, 2000 against the grant of patent.

The case involves opposition proceeding under the Patents Act, 1970 before the recent amendments which introduced a two-stage opposition, i.e., pre-grant opposition and post-grant opposition. The reference to section 25 in the proceeding is to the provisions of the section as it was before the Patents (Amendment) Act, 2002.

The invention is defined in the claim of the specification as follows:

1. A process for the preparation of a therapeutic anti-inflammatory and analgesic composition for tropical use which comprises the following steps:
(a) forming a mixture of 0.5% w/w to 30% w/w of a percutaneous enhancer and 2.5% w/w to 30% w/w of one or more vehicle/base as herein described;
(b) adding to the said mixture of step (a) 0.1% w/w to 10%w/w of nimesulide following by stirring the mixture until completely dissolved;
(c) forming homogenous mixture of 0.5% w/w to 12% of a surfactant, 0.2% w/w to 50% w/w of a Gelling agent/thickening agent of the kind herein described and 2.5% w/w to 30% w/w of one or more the said vehicle/base in a homogeniser to obtain a homogenized mixture;
(d) adding the said mixture obtained in step (b) to the said homogenized mixture obtained in step (c) under stirring to obtain the desired composition for analgesic use and wherein up to 2.0% w/w of a neutralising agent/pH adjusting agent as herein described is added to the composition to neutralize or adjust the pH of the mixture.

The application was opposed on the following grounds

Wrongfully obtained: Section 25(1)(a)

The opponent produced proof to show that the business of the applicant dealt with compression packing, yarn packing and zero compression packing and that the applicant was not a pharmaceutical company. The opponent alleged that the patent was wrongfully obtained from different specifications and documents. The present patent was also identical with Patent Application No. 1389/Del/1995 filed on July 25, 1995. The opponent pointed out that all the figures, the way of presentation and even the grammatical mistakes were common to both the applications. The applicant denied that above allegations. The Controller observed that the Application No. 1389/Del/1995 was not published or accepted before the date of filing of the Application No. 454/BOM/1998. Hence the earlier application was not in the public domain at the time of filing of the alleged invention. The Controller held that no clear case of wrongful obtainment was made as there was no sufficient evidence to prove this ground.

Reference cited by the opponent that the applicant was involved in a different trade (not in pharmaceutical business) will not in itself be a ground to conclude that the invention was wrongfully obtained. The order of the Controller did not throw any light on this issue.

Prior Publication: Section 25(1)(b)

The opponent had also pleaded that the invention as described in the specification and claims of the Patent Application No. 183458 has been defined and described in several patents granted and published - a detailed list of which was given by the opponent. It was alleged that these patents anticipate the subject matter of the present application.

Despite citing many patents, the stress of the opponent case was based on the Patent Application filed in Sri Lanka having Patent No. 11012, granted on September 20, 1996. The opponent compared the said document with the present application. In defence, the applicants stated that all the cited applications were not open to public on the date on April 4, 1997, the filing date of the parent application to which the present application is antedated. The applicant prayed for the dismissal of this ground as being baseless and vague. Moreover, they pointed out that the opponents have not furnished English translated copy of many patent of foreign countries on which they had relied upon and hence the same could not be taken on record as evidence. The applicant also distinguished the US Patent No.5688829 as being one for product where as the present application was for a process.

With regard to anticipation, the Controller relied on Canadian General Electric Company v Fada Radio AIR 1950 PC 1 to show that to amount to anticipation, the latter invention must be described in the earlier publication that is held to anticipate it. It is not sufficient to show that the earlier invention described in an early specification could have been used to produce a particular result. It must be shown that the specifications contain clear and unmistakable directions on how to use it. It must be shown that the public have been so presented with the invention that it is out of the power of any subsequent person to claim the invention as his own.

The test of anticipation is that the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive and understand and be able to practically apply the discovery without the necessity of making further experiments. Only such disclosure can invalidate a subsequent patent. To establish anticipation, the publication relied upon should satisfy the following conditions.

1. it must have been effected before the priority date of the claim which is the subject of attack by the opponent, and
2. such publication may include any specification filed in pursuance of an application for a patent made in Indian on or after Jan 1, 1912 or any other document published anywhere, and
3. the claim attacked must be contained in any of the said publication.

The Controller held that non-production of translated copies of the document containing prior disclosure would be detrimental to the case of the opponent. However, the Sri Lankan and Nigerian Patent application relied upon by the opponent were granted on 20/09/1996 and 03/03/1997 respectively. The Controller after making a comparative table on the impugned patent and the Sri Lankan and Nigerian patents concluded that two questions should be answered in determining whether an invention is novel.
1. Does a particular document or action disclose the invention in such a way as to make it part of the state of the art?
2. Does the document or action make available the necessary information to destroy the novelty of the invention?

While compared to the Sri Lankan and Nigerian patents, the Controller held that the impugned application did not pass the test of novelty. A comparison of claim 1 of the impugned application and claims 20, 21 and 22 of the Sri Lankan or Nigerian Patents show that the principal claim lacks novelty. Claims 2 and 3 of the impugned application also lacks novelty in view of the claims 5 and 7 of the above said foreign patents.

Prior public knowledge or prior public use in India: Section 25(1)(d)

In the light of the several patents relied upon by the opponent, it was canvassed that the invention was publicly known and used in India. It was brought to the notice of the Controller that the product relating to Nimesulide gel/tropical and transdermal composition was present in the Indian market in July 1996. The Controller held that the opponent would succeed on this ground too for the reasons given for the earlier ground of prior publication.

Obviousness and lack of inventive step: Section 25(1)(e)

The opponent had alleged that the impugned application was substantially identical as the invention disclosed and claimed in prior published and granted in Sri Lanka and Nigeria. For the reasons stated by the Controller under the ground of prior publication, it was held that it is very obvious that a man in the art could have done the same thing as claimed by the applicants. The above ground was also granted in favour of the opponents.

Novelty: Section 25(1)(f)

The Controller held that the opponents would succeed even on this ground for the reasons given above.

The Controller ordered that the grant of the Patent on the application for Patent No. 183458 shall be refused and ordered cost of Rs 17,100 to be paid by the applicants.

The above case amply illustrates the effectiveness of opposition procedure. Unlike the examination conducted by the Patent Office which could be plagued with information-scarcity, the opponents have a distinct advantage with regard to knowledge of the invention. Being active participants in the pharmaceutical trade, the competitors can provide for vital information with regard to prior publication and prior user.

Order on costs

Under section 77(1)(e), the Controller has the power to award costs in an opposition proceeding. The matters in respect of which cost can be awarded and the limit of such costs are detailed in the Fourth Schedule. As per section 77(2), the order for costs awarded by the Controller shall be executable as a decree of a civil court.

Exclusive Marketing Rights — The importance of opposition proceedings

This article was published in The Hindu Business Line on Friday, Jun 30, 2006.

No Patent Office, howsoever well-equipped, can keep pace with the rapid strides at which science grows and technology proliferates. The knowledge should essentially come from the competitors who have expertise in that particular field of technology. The grant of EMR, the proceedings for infringement and rejection of patent application have raised uncomfortable issues.

A string of infringement actions and two contradicting High Court decisions later, the Controller of Patents has rejected the application for the grant of patent to Gleevac, a life-saving anti-cancer drug manufactured by Novartis.

It was pointed out in these columns (`Exclusive Marketing Rights — a monopoly without a right', Business Line, March 20, 2004) that the EMR (Exclusive Marketing Rights) holder, pending the processing of its patent application, would get a free hand to exclusively market the product without any competition .

On January 25, 2006, the Controller of Patents refused to proceed with the patent application for the above drug pursuant to opposition proceedings initiated by the competitors.

As apprehended, with the rejection of patent application, the foundation on which the EMR was granted stands demolished, leaving questions on what happens when the law provides for a monopoly in the present, anticipating a right that may or may not be granted in the future.

The grant of EMR, the interim proceedings for infringement before the High Courts and the eventual rejection of patent application have raised uncomfortable issues with disconcerting regularity.

Even before the cries against granting a patent-like right without following a patent-like procedure could die down, the incongruity of differing interim reliefs, one by the Madras High Court and the other by the Bombay High Court, on the same set of facts, fuelled a further furore.

The rejection of the patent application was no less tumultuous. Consider the following three issues to understand how the first-ever contested case on pharmaceutical patents in the post-WTO era has been handled.

Why did not the preliminary examination before the grant of EMR reveal what the Controller had determined later with regard to patentability of the invention?

One of the grounds for rejecting the patent application was that the drug was not an invention under Section 3(d) of the Patents Act, 1970. Section 24A of the Act (now omitted) empowered the Controller to refer the patent application to an examiner for making a report on whether the said invention came under the excluded category of inventions detailed in Sections 3 and 4 of the Act.

Ideally, the examination under Section 24A should have revealed that the drug was not a patentable invention under Section 3(d) and it was only a new form of a known substance as held later by the Controller. This lapse could be directly attributed to the lack of opposition procedure before the grant of EMR.

Why did not the courts look into the arguments with regard to validity of the invention, raised by the defendants in the infringement suits? True, the courts are not obliged to look into the validity of a grant at the interim stage. But where the grant was based on a summary procedure devoid of any opposition mechanism and where the courts have been urged with details of invalidity, the courts could have considered the issue of validity as a preliminary issue (the Bombay High Court did consider the issue of validity is some detail).

Ironically, the patent application has now been rejected by the Controller on the same ground on which a revocation was prayed for before the High Courts.

Why did not the Patent Office determine, in the first instance, that the conditions for the grant of EMR were not satisfied?

No EMR would have been granted if the basic conditions for the grant were not satisfied. In the opposition proceedings before the Controller it was alleged that the application filed in India on July 17, 1998, as a convention application, claimed Swiss priority, when Switzerland was not a convention country on that date.

The Controller agreed with the merit in the above contention. This raises critical questions about the information supplied at the time of application. More so, the allegation that the EMR holder had misled the Patent Office was specifically raised before the Bombay High Court.

Every patent discloses information about the area in which the invention is claimed. The patent system — a term that signifies the conglomeration of all the patents granted, pending applications and information disclosed through patents or otherwise amounting to prior art — can itself be considered as an information bureau providing scientific and technological information to the world at large. Opponents to a patent play the crucial role of supplying information that is not available to the Patent Office.

The summary nature of the grant of EMR appears to be the root cause for the above anomalies. To begin with, the nature of grant of the EMR was summary, discreet, discretionary and without any redress mechanism for opposition of such a grant. The summary nature ensured that the entire process was accomplished quickly without the fanfare of publication and the opposition that usually followed it.

Patent Offices are often criticised for incompetence and blamed for granting patents for things that ought not to be granted. No Patent Office, howsoever well-equipped, can keep pace with the rapid strides at which science grows and technology proliferates. The knowledge about an earlier invention or a disclosure should essentially come from the competitors who have expertise in that particular field of technology.

The procedure of opposition by peers is a process devised to overcome the information-scarcity that may affect the Patent Office.

As the EMR episode illustrates, taking away the process of opposition and advocating summary procedure for rights that confer a monopoly (like patents and EMRs) can create an imbalance in patent information and affect competition.

`Breaking' patents — Effective use of compulsory licensing

This article was published in The Hindu Business Line on Wednesday, Dec 15, 2004.

In the light of the Doha Declaration and the bold Brazilian initiative to break the patent of several HIV/AIDS medications, the Government should provide for effective compulsory licensing which, exercised cautiously, has the power to remedy most of the problems relating to access and pricing of drugs. Doing so would be a great show of political will in implementing the legitimate flexibilities available under the WTO.

THE Brazilian Government's World AIDS Day message came as a shocker to many pharmaceutical majors. The Government announced that, to prevent the financial collapse of its successful public health programme providing free antiretroviral drugs to HIV/AIDS infected persons, it would break the patent of several medications.

As the Brazilian law permits the government to disregard patents in case of health emergencies such as the HIV/AIDS epidemic, antiretroviral drugs will no longer enjoy patent.

By this, the Brazilian Government has given a new dimension to compulsory licensing. Ordinarily, the TRIPS (Trade Related Intellectual Property Rights) Agreement does not allow countries to provide for compulsory licences for drugs which are patented elsewhere.

In its new avatar, compulsory licensing will be extended to permit domestic production of the drugs covered by foreign patents with the permission of the Brazilian Government.

Technically, the term "breaking" patents means that the patented drugs enjoying monopolistic protection will be allowed to be manufactured domestically.

Thus, a patented drug could be used without the authorisation of the patent holder. In economic terms, it would mean national production of patented drugs from start to finish without having to depend on outside support for essential materials.

Article 31 of the TRIPS Agreement provides for such use without the authorisation of the right holder.

Though the TRIPS Agreement emphasises on obtaining authorisation from the right holder on reasonable commercial terms, it, nevertheless, does allow this requirement to be waived in the case of a national emergency or other circumstances of extreme emergency or in cases of public non-commercial use.

This exception is embodied in Section 92 of the Indian Patents Act, 1970 which empowers the Central government to grant compulsory licences in special circumstances.

Compulsory licensing in India

As the Indian experience shows, the grant of compulsory licences is riddled with technical absurdities. Under Section 84 of the Patents Act, an application for the grant of compulsory licence can be made to the Controller of Patents only after the expiration of three years from the date of the grant of a patent.

In a world where diseases spread in epidemic proportions, a monopoly to manufacture and market a life-saving drug for three years can result in certain havoc.

The Section also requires the person making the application to set out the nature of interest and provides an opportunity for the patent holder to oppose the application.

All this may sound fine in the interest of natural justice, but as compulsory licensing would be resorted to in emergency situations, any difficulty in seeking a grant would unnecessarily delay the process. Delay in getting access to life saving drugs would literally be a matter of life and death.

Chapter XVI of the Patents Act deals with compulsory licences. This chapter is drafted along the lines of Article 31 of the TRIPS Agreement. It is pertinent to note that the Article deals only with "use" and not with "manufacture" of patented articles.

So far, compulsory licensing has been generally understood to include a right covered by the patent. Currently, only process patent is available for drugs and medicines. Accordingly, a compulsory licence so granted will be to the extent of the preceding process patent.

Come 2005, the patents laws in India will be amended to introduce product patents for drugs and medicines for a period of 20 years. When product patents are granted, the corresponding licences would normally include all the rights covered by the product patent. The final say, however, is with the Controller of Patents who shall decide the terms of the grant of compulsory licence.

Moreover, under the Indian Patents Act, the grant of compulsory licence is available only for drugs patented under the Act. It does not provide for compulsory licensing of drugs patented elsewhere.

This loophole has been exploited by many pharmaceutical majors which prefer to export their drugs into India and have chosen not to apply for a patent in India.

Proposed Amendment

The controversial Patents (Amendment) Bill, 2003 attempts to remedy this situation partially. It proposes to introduce Section 92A, which will empower the Controller to grant compulsory licence for the manufacture and export of patented pharmaceutical products to any needy country if a compulsory licence has been granted in that country.

The hue and cry over the proposed Patent Bill is predominantly premised on the availability and pricing of drugs.

Unless the new amendment, which will have the effect of fully complying the Indian patent laws with the WTO standards, takes care of access to live saving drugs and the related pricing issues, the hard work done at every World Trade Organisation meeting will be rendered futile.

Doha Declaration

The Declaration on TRIPS Agreement and Public Health (Doha Declaration) gives member-countries the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.

It also states that the TRIPS Agreement can and should be interpreted and implemented in a manner supportive of the WTO members' right to protect public health and to promote access to medicines for all.

The Government, the courts and the patent offices should uniformly recognise the problem at hand and work together to interpret and implement the TRIPS Agreement keeping public health as the priority.

In the light of the Doha Declaration and the bold Brazilian initiative, the Government should provide for effective compulsory licensing, which exercised cautiously has the power to remedy most of the problems relating to access and pricing of drugs.

To do so will be a great show of political will in implementing the legitimate flexibilities available under the WTO.

See my previous post Breaking patents.

Patents Ordinance: Surviving the Winds of Change

This article was published in Pharmabiz on Wednesday, January 12, 2005.

The apprehensions of the pharmaceutical industry voiced by various associations seem more like a knee-jerk reaction to the recent Patents Ordinance than a studied response. The Ordinance contains, by and large, the very same provisions as the Patents (Amendment) Bill, 2003 which was introduced in the Rajya Sabha on December 22, 2003. The industry had sufficient time to react to these new provisions. The amendment in the law was inevitable as India had to comply with the obligation of fully conforming the Patents Act, 1970 (Act) to the TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement under the WTO. Everybody knew that the transitional period of 10 years granted to developing countries under Article 65 of the TRIPS would come to a definitive end on December 31, 2004.

The Ordinance has put an end to the era of reverse engineering. Expectedly, the pharmaceutical industry has raised some fears about the Ordinance mainly with regard to patentability, pre-grant opposition and compulsory licensing.

Patentability

As the patents law in India developed differently keeping in view the needs of the local consumers and the domestic producers, the exclusions on patentability are more than those found in patent legislations of other countries. The Act defines "invention" as a new product or process involving an inventive step and capable of industrial application. Section 3 of the Act provides for the inventions that are not patentable. The section enumerates 15 such non-patentable inventions which can be used as a ground in opposing a patent before its grant or in revocations proceedings after the grant. Contrary to the popular belief, the Ordinance has made only cosmetic changes and has left the existing provisions intact.

The issue of patentability assumes importance as it limits the scope of inventions for which a patent can be claimed. The Ordinance provides for challenge of an invention at various levels.

Multi-level challenge mechanism

The Ordinance has introduced a multi-level patent challenge mechanism. First, it provides for a preliminary challenge even before the patent is granted. Section 25 contains a mechanism by which any person can represent by way of opposition to the Patent Controller against the grant on the ground of patentability. This is known as the pre-grant opposition. Some sections of the Industry have raised their dissatisfaction that only a "representation" is permitted and that the opposition of the person is not "heard". The objections at this stage are of a preliminary nature and any failure at this stage can be remedied at the next level.

Secondly, the Ordinance provides for post-grant opposition at any time after the grant of patent but before the expiry of a period of one year from the date of publication of the grant of patent. Any interested person can do this. Again the Ordinance does not prevent a person who had raised a failing opposition at the pre-grant stage to oppose the patent after its grant. There are 11 comprehensive grounds enumerated for post-grant opposition including patentability.

Thirdly, even if all efforts to oppose the grant of patent, either before or soon after the grant, fails, there exists the option of approaching the IPAB (Intellectual Property Appellate Board) under section 64 of the Act as amended by the Ordinance. Here again, any interested person may prefer a petition to the Appellate Board for revoking a patent on any of the 17 grounds enumerated therein. Needless to say, patentability is one of the grounds on which the patent may be revoked.

Finally, if a competitor is found to manufacture a patented drug and the patent holder had filed a suit for infringement against the competitor, all the grounds available under section 64 for revoking a patent may be raised as a counter-claim in a suit for infringement before the High Court and the High Court, if it deems necessary, has the power to revoke a granted patent.

Compulsory licensing

Chapter XVI of the Patents Act, 1970 deals with compulsory licences. Except for the inclusion of a new section 92A, the provisions on compulsory licensing under the Act have remained untouched. The grant of compulsory licenses, even before the Ordinance came into force, was riddled with technical absurdities. Under section 84 of the Act, an application for the grant of compulsory licence can be made to the Controller of Patents only after the expiration of three years from the date of the grant of a patent. In a world where diseases spread freely beyond all geographic barriers, a monopoly to manufacture and market a life saving drug for three years can result in colossal loss of human lives. The section also requires the person making the application to set out the nature of interest and provides an opportunity for the patent holder to oppose the application. These provisions impose unwarranted difficulties in seeking a grant of a life saving drug and unnecessarily delays the process. The final say, however, remains with the Controller of Patents who shall decide the terms of the grant of compulsory licence.

The grant of compulsory licence is available only for drugs that are patented under the Act. It does not provide for compulsory licensing of drugs patented elsewhere. This loophole has been exploited by many pharmaceutical majors who now prefer to export their drugs into India and have chosen not to apply for a patent in India.

Moving ahead

The Ordinance has only brought into effect an inevitable change that India, as a founding member of the WTO, had agreed to 10 years ago. Due to India's international obligations and the possible threat of sanctions, the industry stands very little to gain in seeking for changes in the Ordinance. The industry should look at the flexibilities provided within the patent system and the WTO and devise ingenious ways to apply and interpret them. By doing so, it would be conforming its practices with the Doha Declaration on Pubic Health which allows a Member Country to interpret and implement TRIPS Agreement in a manner supportive of its right to protect public health and to promote access to medicines for all.

Patently Confusing: Same Problem, Differing Verdicts

This article was co-authored with Rishi Kumar M. Dugar, Advocate, Madras High Court.
It was published in The Economic Times on 11th December, 2005.

At a time when the world is anxiously watching the pharmaceutical scene in India as to how the Asian Tiger is complying with its obligations under the WTO, any anomaly in implementing these obligations can have the effect of sending the wrong signals. The recent amendments to the Patents Act, 1970 (“the Act”) has been in the thick of controversies thanks to the last-minute hustle in bringing the law in conformity with the WTO obligations. At the backdrop of all the hue and cry, two recent decisions of the Madras and Bombay High Courts, which have gone largely unnoticed, has turned the spotlight to the challenges in implementing the provision of the Act.

In November 2003, the Controller of Patents granted Exclusive Marketing Rights (a right to exclusively sell and distribute a product - EMR for short) to Novartis, a Swiss pharma giant, for its patented anti-cancer drug, ‘Glivec’ used in the treatment of Chronic Myeloid Leukaemia (CML) and stomach cancer. The drug containing Imatinib Mesylate did not enjoy patent protection in India, though it was patented in various countries. However, under Chapter IV A of the Act, (which has been omitted by the recent amendment since it was of a transitory nature) Novartis was able to obtain an EMR for Imatinib Mesylate.This move affected many Indian pharmaceutical companies who have been manufacturing the same drug, Imatinib Mesylate, under different trade names and selling them at a lesser price.

The preconditions stipulated under section 24 B of the Act for grant of an EMR were: (i) an application for the same invention should have been filed in a convention country on or after 1 January 1995, (ii) the patent and approval to sell and distribute the invention should have been granted in that country on or after the date of making a claim in India, and (iii)the approval to sell or distribute the invention should have been granted by the concerned authority.Upon the satisfaction of these conditions, the EMR is granted from the date of approval till a period of five years or till the date of grant of patent or the date of rejection of application for the grant of patents whichever is shorter. The grant of EMR assures a patent-like protection to be extended to the product even before the patent application is processed.

Section 24 E of the Act provides that all suits for infringement of a right under section 24 B shall be dealt with in the same manner as if they were suits concerning infringement of patents (Chapter XVIII). Exercising its right, pursuant to the grant of an EMR for its patented drug “Glivec”, Novartis initiated infringement action against various Indian manufacturers who were manufacturing the similar drug, in various courts, including the Madras High Court and the Bombay High Court.

The Madras High Court in Novartis AG v. Adarsh Pharma [2004 (29) PTC 108 (Mad)] granted an interim injunction in favour of Novartis, restraining the various Indian manufacturers from manufacturing drugs similar to ‘Glivec’. Though having the benefit of the Madras decision, the Bombay High Court in Novartis AG v. Mehar Pharma [2005 (30) PTC 160 (Bom)] differed with the finding of the Madras High Court and refused to grant an interim injunction. The Bombay High Court held, that the Madras High Court has not properly considered the settled law in the matter of grant of temporary injunction in relation to a patent of “recent origin”.

At the heart of the controversy is the applicability of a long-standing rule, that whether an interim injunction can be granted for a patent of “recent origin”? In the arguments canvassed before both the High Courts, a plethora of decisions on the aforesaid issue were referred and relied upon before the Madras High Court.

It was submitted before the Madras High Court that since the EMR was of a “recent origin” and once a challenge to the validity of the same is made, the Court should not ordinarily grant an injunction. Reliance was placed on the decision of the same Court in Manicka Thevar v. Star Plough Works AIR 1965 Mad 327, where it was held that an injunction will not be granted if the patent is a recent one and where the defendant disputes the validity of the grant. With regard to the criterion for determining the recent origin of a patent, the court formulated a proposition that any patent less than 6 years old was regarded as a recent one. The above ruling was followed by the Calcutta High Court in Hindustan Lever Ltd v. Godrej Soaps Ltd AIR 1996 Cal 367. A Division Bench of the Calcutta High Court in an earlier decision, Boots Pure Drug Co. v. May & Baker 52 CWN 253 also held similarly.

The Madras High Court distinguished the decision of Manicka Thevar by concluding that, since the validity of the EMR is for a period less than six years, then, a fortiori, the 6-year rule of “recent origin” will not apply.

It is submitted that the aforesaid finding is incorrect on two accounts. First, a rigid reading of the 6-year rule (to mean nothing but 6 full years) contributed to the finding that the EMR was for a shorter period than 6 years and hence the rule will not apply. The 6-year rule, which was formulated many decades ago, had its emphasis on the existing state of art; by which an invention would be open to challenge in its initial years.

Secondly, it was erroneous to hold that the EMR is of recent origin when the rule requires that the patent should be of recent origin. Keeping in mind the nature of the EMR which is a right granted on the basis of an earlier patent (foreign patent) granted in another country, it would not serve any purpose to compare the term of the EMR and conclude that the recent origin rule will not apply. Rather, the term of the patent (foreign patent) and the date of its grant should be the relevant factors. In the instant case, the patent based on which the EMR was granted came into force in August 2002 and would qualify for an invention of recent origin by any measure.

It is a settled law that the grant of an interlocutory injunction is a matter of discretion and depends on the facts and circumstances of each case and that there are no fixed rules as to when an injunction should or should not be granted. But when two High Courts, on similar set of facts, take diametrically opposite views on the issue of the grant of interim injunction, the trend is disturbing. For cases dealing with transitory rights like EMR, an interim order rendered by the court can be very critical and can have the effect of conclusively deciding the case.

The war between the big pharmaceutical giants and the generic pharmaceutical companies will soon be fought in new terrains. With India’s emergence as a key player in the pharmaceutical sector, judicial rulings on the Act must be tempered with clarity and sound reasoning. Ironically the Novartis case was the first ever decision involving the application of the new patent regime. If the above decisions by the High Courts are any indication of the things to come, then one shudders to think of the confusion in store.

Patentability issues: New medical uses of known substances

This article was published in pharmabiz on Wednesday, March 16, 2005.

Under the Patents Act, 1970 patents are granted only for inventions. For a thing or a substance to qualify as an inventions it should satisfy the three prerequisite conditions of novelty (the invention should be new), non-obviousness (the inventions should contain an inventive step) and should be capable of industrial or commercial application. The new ordinance has brought in patent protection for food, medicine and drug products. It is commonly understood that the patent would be for the invention of the product per se. To what extent medical uses of known substances would qualify for patent protection is an issue that the Patent Office will soon be called upon to decide.

The focus of pharmaceutical research has shifted in the recent past from the invention of new drugs to finding new uses for known substances. This fact is evident from the low number of new drugs that are clinically tested and approved for marketing in any given year. Pharmaceutical companies are now keen on discovering new properties or uses of known drugs. An oft quoted example involves the drug aspirin which was originally known to have only analgesic properties but later novel properties like thinning of blood were discovered.

A product patent would provide protection not only over the thing itself but also over all subsequent uses. Traditionally, the British approach treated a claim to a 'product for a particular use' as a claim to the product itself. Any novel use at a later time could not qualify for protection under the earlier patent. The product would lack novelty even if the product had been put to a different use. This approach did not recognise 'novelty of purpose' as a ground for the grant of a patent. This rigid approach has now been relaxed to include second and subsequent medical uses. The European Patent Office and the English courts have begun to recognise novelty of purpose in all fields of technology.

Novel medical uses

The question as to whether the discovery of a new advantage of an old thing used in an old way would be entitled to a patent protection under the new patent ordinance will have far-reaching implications on the pharmaceutical industry. The insertion of the word 'mere' in section 3(d) has opened new possibilities for claiming 'novelty of purpose' as per the Act. Section 3(d) of the Patents Act, 1970 reads as follows:"3.What are not inventions - The following are not inventions within the meaning of this Act - (d) the mere discovery of any new property or mere new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;"It could be argued that the inclusion of the word 'mere' has widened the scope of patentability so as to include novel medical uses.

Exclusion of methods of medical treatment

Most countries regard the method of treatment of human and animal body as non-patentable. The exclusion of methods of treatment caused concern to the pharmaceutical industry which has by now shifted the focus of its research to discovery of new uses/new benefit from old substances, from the discovery of new substances. As a concession, pharmaceutical industries were entitled to claim patent for a new use of a known substance in many countries, particularly, United Kingdom where section 2(6) of the UK Patents Act, 1977 provides thus:

"the fact that an invention consisting of a substance or composition for use in a method ofmedical treatment forms part of the state of the art, shall not prevent the invention from being taken to be new, if the use of the substance or composition in any such method does not form part of the state-of-the-art."

The above provision creates a statutory exception to the traditional British view that the mere discovery of purpose could confer novelty of an invention. The provision confers novelty through a new purpose, i.e., new pharmaceutical use of a known substance, even though the substance itself is known to be a part of the state-of-the-art.

Second and subsequent medical uses

Originally it was believed section 2(6) would apply only to the discovery of the first medical use of known products. A plain reading of the provision would clearly exclude second and further medical uses as they would lack novelty. The scope of a similar provision under the European Patents Convention (54(5)) was considered by Enlarged Board of Appeal of the European Patent Office in Eisai / Second Medical Indication (Eisai G5/83 [1985] OJEPO 64). Emphasising that exception to patentability should be constricted narrowly, the Board held that Article 54(5) also applied to second and subsequent medical uses. Such claims would be upheld, the Board opined, provided that the claims were drafted in a style known as the "Swiss form of claims."The status of second medical use was considered by the UK Patents court in Wyeth's Application [1985] RPC 545. One of the claims in this case was drafted in the Swiss form. The examiner refused to grant such a claim, but on appeal, the Patent Court allowed it. There are no provisions in the Indian Act similar to section 2(6) of the UK Act or article 54(5) of the European Patent Convention. But it is pertinent to note that provisions very similar to section 3(d) of the Indian Act exist in other countries which states that a "mere new use for a known substance" will not qualify for a patentable invention. It would only be a matter of time that express statutory provisions providing for patent protection for new use of a known substance would be introduced in Indian law in keeping with the global trend. Till then, the Patent Office could be urged to consider patents for new use of a known drug as the Indian Act excludes only a mere new use for a known substance. As such there is no prohibition in granting patents for the use of the substance in any method which does not form part of the state-of-the-art.

"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.

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.

Chemical Names as Pharmaceutical Trade Marks

Here's an odd one on trademarks.

The article was published in pharmabiz on Thursday, December 30, 2004.

Normally, any symbol or word capable of graphical representation and distinct enough to distinguish the goods and services of one person from those of others may be registered as a trade mark. Upon registration, the owner acquires an exclusive right, in perpetuity, to use the trademark.It is common practice to name drugs either by the name of the organ it treats (Liver: LIV-52), or by the principal ingredients (Cipro-floxacin: CIPRO), or the name of the ailment (Common cold: COLDARIN), which enables the doctor to associate a particular trade name with the organ, ingredient or ailment thereby reducing the chance of error.

Predominan-tly, trade names are derived from the chemical name or the generic name. The chemical names and generic names cannot per se be registered as trade mark as they are hit by section 13 of the Trade Marks Act, 1999. The section states that no word which is the commonly used and accepted name of any single chemical element or single chemical compound in respect of a chemical substance shall be registered as a trade mark.

Moreover, chemical names would be rendered unregistrable as a trade mark under clause (a) of section 9 which states that trade marks devoid of any distinctive character, capable of distinguishing goods of one person from those of another, shall not be registered. As chemical names designate the kind of goods, the goods will be rendered unregistrable even under clause (b) of section 9 which provides that trade marks which consist exclusively of marks which may serve in trade to designate the kind of goods shall not be registered.Under section 23(1) of the old Act (Trade and Merchandise Marks Act, 1958) the Central Government is empowered to give directions as to the list of marks that are not registrable. Accordingly, it has issued a direction that no trade mark shall be registered in respect of the following drugs:
1. Analgin
2. Aspirin
3. Chloropromazine
4. Ferrous Sulphate
5. Piperazine and its salt such as adipate, citrate and phosphate
6. New single ingredient drug first introduced in India

While making a trade mark application for pharmaceuticals pertaining to the above list, the Registrar of Trade Marks requires the filing of an affidavit stating that the trade mark applied for is not used or intended to be used in respect of the listed drugs. However, the new Act (Trade Marks Act, 1999) does not contain a similar provision.The pharmaceutical industry has devised ways to get over these provisions which restrict the use of chemical names. Ingeniously, drug manufacturers resort to coining words which contain a part of the chemical name, so that the product may be identified with a particular chemical substance. For instance, the drug containing the Active Pharmaceutical Ingredient (API) Ciprofloxacin is manufactured by different companies under the trade names ALCIPRO, CIPRO, CIPROBID, CIPROLET, CIPROVA. The word CIPRO figures in the trade names of all the above products. This serves the purpose of identifying the drug. But the same has also given rise to trade mark infringement cases filed by drug companies on the ground that product of its competitor which employs a part of the chemical name in its trade name, is deceptively similar to its own trade name.

In USV Ltd. v. Systopic Laboratories Ltd., 2004 (1) CTC 418, the Madras High Court had to decide whether the two pharmaceutical trade names "PIO" and "PIOZ" containing the API, Pioglitazone were deceptively similar. The Division Bench of the Madras High Court upheld the decision of the Single Judge in USV Ltd. v. Systopic Laboratories Ltd., 2003 (27) PTC 203 (Mad). In holding that the two names were not deceptively similar, the Court stated that the word "PIO" has become publici juris and that there could be no monopoly over it. The rules regarding deceptive similarity take a special connotation with regard to pharmaceutical trade names. As the drugs are prescribed by registered medical practitioners and dispensed by qualified pharmacists, the chances of confusion arising out of two products being deceptively similar are considerably reduced. To this extent, some similarity is allowed.

The concept of publici juris deals with public rights. The term signifies a thing or a right that is open and exercisable by all persons. It designates things that belong to the entire community, and not to any private party. The Madras High Court held that the term PIO being a part of the chemical name, PIOGLITAZONE, belongs to the public domain and as such no one can have a right over it.Usually, common suffixes or prefixes do not come in the way of distinctiveness. The nature of certain trades may require common suffix/ prefix for the purpose of familiarity. The distinctive nature of the word would then depend on the remaining part of the word attached to these common suffixes and prefixes. A term would be considered as a prefix or suffix only if they are derived from common or generic words.

But if the name is derived or coined form the name signifying the principal ingredient used in the medicine, no distinctiveness or exclusiveness can be claimed by the manufacturer in respect of that part of the name. It is now well-settled that no person can claim exclusive use of the descriptive and generic terms and it would be highly undesirable to confer on one trader proprietary right over the use of an ordinary, descriptive or generic word indicative of the nature, composition and quality of the goods as that would give him complete monopoly to exhibit the word to the exclusion of others(Panacea Biotec v. Recon, 1996).Pharmaceutical companies should cautiously exercise the choice of naming their products with trade names derived from the chemical or generic name. Though it grants familiarity to the new drug, it also dilutes the proprietary right over the trade name. There can be no monopoly over a chemical name which is descriptive of a particular ingredient.

Intellectual property rights — US, trade sanctions and IPRs

This article was published in The Hindu Business Line on Tuesday, Jun 15, 2004.

DESPITE India's recent endeavour to comply fully with its TRIPS (Trade Related Aspects of Intellectual Property Rights) obligations, the US has put India on the "priority watch list" under Section 301 for failing to provide adequate level of protection for Intellectual Property Rights.

Section 301 and USTR

Section 301 of the US Trade Act, 1974 permits the US to unilaterally treat trade related aspects of Intellectual Property Rights (IPRs) as a part of its trade law. Section 301, through an amendment in 1984, empowered the US President to take action for inadequate protection of IPRs of US citizens in foreign countries.

An investigation under Section 301 may be commenced either by a petition filed by an interested party before the United States Trade Representative (USTR) requesting an investigation of a particular practice of a foreign country or by suo motu action of the USTR. Upon the conclusion of investigation, the US may take retaliatory action against the recalcitrant country.

Action under Section 301 will include suspension or withdrawal of trade concessions, imposition of trade duties and other restrictions and suspension or withdrawal of benefits under the Generalised System of Preferences (GSP). GSP offers preferential treatment for developing countries.

Under Section 301, the denial of adequate and effective protection of the IPRs, even if the foreign country is in compliance with TRIPS, can be a cause for retaliatory action. Thus, the threshold of intellectual property protection mandated under Section 301 is much higher than the protection standards under TRIPS.

Section 301 also provides that where an investigation involves an alleged violation of trade agreement, like the WTO Agreement, the USTR must follow the dispute settlement provisions set out in that agreement. Thus, the power to initiate unilateral action against India for non-compliance with the TRIPS, which forms a part of the WTO Agreements, is inhibited, as the USTR must take recourse to the dispute settlement mechanism under the WTO.

"Special 301" Annual Report
The Annual Report of the USTR identifies countries that are "priority foreign country", where investigations on IPRs infringement were to be launched and action completed within the specified time limit. Though not required by law, the USTR also identifies and puts countries on the "priority watch list" (countries with whom bilateral negotiations are initiated) or the "watch list" (countries whose IPR developments are monitored).

The Special 301 Annual Report issued on May 3 identifies India as a `priority watch list' country and threatens it with trade sanctions, which may be imposed either unilaterally through Section 310 or multilaterally through the WTO system. In spite of complying with its TRIPS obligations, India continue to be monitored under Section 301. This is due to the fact that Section 301 demands a greater protection for IPRs than envisaged in the TRIPS.

Unilateralism vs multilateralism

The conclusion of the TRIPS Agreement was seen as a major gain for the developing countries insofar as they traded a unilateral measure — the Section 301 of the US trade law — for a multilateral agreement. But the US trade policy on the IPRs has cast doubt and makes the TRIPS negotiations seem a pyrrhic victory.

First, Section 301 remains a part of the US trade law and is actively used even after TRIPS came into force, despite the specific prohibition on unilateral measures contained in Article 23 of the WTO Dispute Settlement Understanding (DSU).

Second, what the TRIPS achieved was to arm all WTO member-countries with trade retaliation measures in the form of sanctions, a power which was earlier vested only with the US. This came to be known as the "internationalisation of Section 301".

Third, TRIPS multilateralised the gains from trade sanctions to all the WTO members through the most-favoured-nation (equal treatment) clause in Article 4 of the TRIPS Agreement.

It is not now open for one country to enter into a bilateral arrangement so as to limit the damage to only one trading partner.

Combating sanctions

The TRIPS Agreement can act to check the use of Section 301 actions on matters covered by the WTO Agreements as WTO members can challenge retaliation actions of the US under the WTO Dispute Settlement mechanism.

Moreover, the US is more likely to use the multilateral dispute settlement procedures under the WTO in settling trade issues on IPRs than resort to unilateral measures contained in Section 301 as it happened in 1997 in US vs. India ("mail-box case").

Even if the US sanctions are not challenged before the WTO, these trade sanctions are likely to have very little effect due to the country graduations from the GSP (once a country graduates from the GSP, it will not be affected by withdrawal of benefits under the GSP), product restrictions and the rapidly diminishing tariff margins between the countries.

The chief objective of the WTO is to progressively open national markets for international trade. This is done by the gradual reduction of tariff and the removal on non-tariff barriers such as product restrictions.

The effect of Section 301 actions by the US will be greatly subdued if developing countries opt to voluntarily forgo the GSP benefits granted to them.