India: Balancing Public And Private Interests In The Intellectual Property Regime

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NEW DELHI – In this month, there have been two court orders in India that underscore the complexities underlying the country’s intellectual property regime. Last Friday (14 September), the Chennai-based Intellectual Property Appellate Board (IPAB) which is responsible for hearing appeals on patent applications, rejected a petition by German pharma major Bayer AG, seeking a stay on an order of India’s Controller of Patents granting a compulsory licence (CL) to Indian generic drug maker Natco Pharma Limited, for a drug used to treat liver and kidney cancer.

“We are happy. That is all I want to say at this point,” M Adinarayana, Natco company secretary, told Intellectual Property Watch by telephone soon after the IPAB came out with its order.

The IPAB order is available here [doc] or here.

Public health advocates have welcomed the order. “This decision once again affirms that courts can and should act in the interest of public health in the case of pharmaceutical products,” Leena Menghaney of Médecins Sans Frontières’ Access Campaign said in a public statement. The case (IPW, Public Health, 20 May 2012) is India’s first compulsory licence (CL).

At the time of writing, Bayer’s future course of action is not known. In May this year, in an emailed statement, Bayer told Intellectual Property Watch, “We will rigorously continue to defend our intellectual property rights which are a prerequisite for bringing innovative medicines to patients.”

James Love, director of Knowledge Ecology International (KEI), said in a statement, “It is possible and indeed likely that Bayer will continue to litigate this issue, which will soon be scheduled for another hearing on its merits, now that the stay has been rejected.”

“It is important that the U.S. and German governments, and the European Commission, resist the temptation to interfere with the Indian legal system while this matter is litigated,” Love said. “What is at stake is nothing less than the right to live.”

“The decision,” Love continued, “is also a test of the 2001 WTO Doha Declaration on TRIPS and Public Health, which says that WTO Members should implement their patent laws ‘in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.’” KEI, an international non-governmental group, has been working on the access to medicines movement for more than 20 years. TRIPS is the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights.

Other Key Cases

The IPAB order in the Bayer versus Natco case comes hot on the heels of the Delhi High Court ruling this month involving Cipla, another Indian generic drug maker, and two pharma multinationals, namely Swiss drug maker F. Hoffmann-La Roche Ltd. and the New York-based OSI Pharmaceuticals Inc. In this case, Cipla was being accused of infringing Roche’s patent on cancer drug Tarceva, which Cipla sells under the brand name Erlocip.

The Delhi High Court in its order [pdf] on 7 September held that Roche’s patent on the drug is valid. However, it also said that Cipla did not infringe Roche’s patent as it has been selling the polymorph B (variant of the basic drug compound) form of the drug which is known as erlotinib in generic terms.

The two recent court orders provide a backdrop to another landmark case involving Indian generic drugmakers and a multinational pharma company that is in the news this week.

Today, 18 September, arguments in the final hearing of the much-talked about Glivec patent case were scheduled to resume in the Supreme Court. Swiss drug major Novartis AG is challenging the denial of patents to its blood cancer drug called by its brand name Glivec in India (Gleevec in the United States). In this case, Novartis is pitted against the Government of India, top Indian generic drug manufacturers (Natco, Cipla, Hetero, Ranbaxy) as well as the Cancer Patients Aid Association(CAPA). Newly appointed Additional Solicitor General Paras Kuhad is representing the Union of India; CAPA’s case is being argued by Anand Grover, another top Indian lawyer who is also currently the United Nations Special Rapporteur on the Right to Health. Other top Indian lawyers like Harish Salve are defending the generic companies.

The legal dispute in the Glivec case centres around a provision of India’s 2005 patent law, called Section 3(d), which states that “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or 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.” The dispute brings to the fore a fundamental question: what is an “invention”? Or more precisely, how much innovation is required to obtain a patent in India?

The ongoing case (IPW, Developing Country Policy, 3 February 2012) in India’s highest court is the final act in a legal battle that has been going on since 2006 when Novartis unsuccessfully pitched for a patent for Glivec. The case has already moved through various rungs of India’s legal system including the IPAB and is now in the country’s top court.

Final Arguments

The final arguments in this case began on 11 September in a packed room in India’s Supreme Court, For many in the court room, it seemed like a crash course in chemistry as Gopal Subramanium, a distinguished lawyer and formerly the country’s solicitor general and now senior counsel for Novartis, quoted chunks from various chemistry textbooks and cited international conventions to make his client’s case that Glivec was indeed a genuine medical breakthrough, had been granted a patent in nearly 40 countries and was deserving of a patent in India. Treatment with Glivec, the Novartis brand, costs about `1.2 lakh Indian rupees (or around USD 2,250) per month. The monthly tab for the Indian generic versions is below `10,000 Indian rupees (about USD 185).

Novartis says it is not fighting this legal battle for money but to vindicate its “honour”. During the court hearing, the company’s lawyers have repeatedly sought to draw attention to its patient assistance programme in India. Novartis claims that 85 per cent of the patients in India were being provided Glivec free of cost. “The purpose is not to make money from the poor. This is not the purpose but am I not entitled for patent for our drug? We are fighting the case on principle,” Subramanium said in the Court last week. Public health advocates point to the discretionary nature of such assistance programmes.

Novartis lawyer Subramanium has argued in court that the grant of patent to Glivec would not hurt public health in India as “authorities were free under the law to direct the company to compulsorily part with licences relating to the drug any time three years after the grant of patent,” as the legal correspondent of one Indian newspaper pointed out in his report.

The flexibility issue is a severely contested territory. In a report titled “India’s patent laws under pressure” this month in The Lancet, one of the world’s most prestigious medical journals, Peter Roderick and Allyson M. Pollock pointed out: “The Obama Administration has been consistent in its efforts to stop compulsory licences, with the Deputy Director of the US Patent and Trademark Office describing the granting of this licence as the “most egregious” example of anti-TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) behaviour. ”

But significantly, these provisions of India’s IPR regime are inspiring health and IPR activists in other developing countries.

“The Treatment Action Campaign (TAC) and Médicins Sans Frontières are currently lobbying for South Africa to adopt a number of the public health safeguards that are upheld in India’s law. In our campaign, we have looked at the Indian laws as a model of pro-public health interpretation of TRIPS,” Catherine Tomlison of TAC’s Fix the Patent Laws Campaign told Intellectual Property Watch.

“In our campaign we are calling for South Africa to reject new use and new formulation patents, as rejected in section 3(d) of India’s patent laws,” Tomlison said. “Currently South Africa does not exclude new uses and new patents from patentability and as a result many medicines are under patent and extremely expensive in South Africa, where affordable generics are available in India.”

“We are also calling for South Africa to require examination of patent applications and to allow for opposition by third parties. We have looked extensively at the Indian experience in implementing examination and opposition as well as the financial and capacity requirements. The Indian experience has shown us that implementing patent examination not only pays for itself with user fees but also generates a significant amount of money for government that can be put back into service delivery. We have been informed by South Africa’s Department and Trade and Industry that the IP policy should be made available this month and that the public comment process will last three months,” she added.

Other African countries, including Botswana and Swaziland, are also in the process of amending their laws to better utilise the flexibilities allowed under TRIPS to protect health. Botswana, for example, has adopted pre-grant
opposition.

A spokesperson for MSF told Intellectual Property Watch that MSF has chosen not to comment on the Novartis hearings because it felt that doing so might interfere with the judicial process, but the medical and humanitarian NGO was taking a very keen interest in the case and awaiting the outcome of the court’s decision.

Speaking on the wider context, however, Michelle Childs, director of policy advocacy for the MSF Access Campaign, told Intellectual Property Watch: “It’s now more important than ever that developing countries use all the public health flexibilities in international trade law; this includes effective compulsory licensing provisions to ensure access if a patent has been granted, but medicines are unavailable or priced out of reach for those who need them. Countries need all the tools at their disposal – it is not an either/or choice; you need preventative measures to stop monopolies being wrongly granted, as well as an antidote to high priced patented medicines.”

Will India strike the balance between patents, patients and profits? It is hard to predict. The ongoing cases raise fundamental questions about the definition of “invention”, what qualifies for a patent under India’s IP regime and the challenges of striking a balance between public and private interests in an emerging economic power, where, paradoxically, the vast majority are still not covered by health insurance and where most people have to pay for their own treatment.

The final outcome of the cases may not be known for weeks, possibly months. But one thing is clear: they could change the game in the health care sector as well as the intellectual property rights regime in India and across the developing world.

Patralekha Chatterjee may be reached at info@ip-watch.ch.

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  1. [...] India, one of the largest manufacturers of generic medicines, has been the target of critics from the research-based pharmaceutical industry about its IP regime, and in particular for a provision of its 2005 patent law, called Section 3(d), which creates a high standard for what is patentable. The country’s law has been challenged in court by several pharmaceutical industries (IPW, IP Law, 18 September 2012). [...]

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