Libertatem Magazine

The Surge in Pharmaceutical Patent

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The potential increase in the grant of product patent shall give considerable rise to the increase in the pharmaceutical patent. In order to be in parallel lines with the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), the amendments incorporated to the Indian Patent Act, 2005 gives the surge of pharmaceutical patent in India. Being administered by WTO, the importance of TRIPS lies in the fact that it requires minimal standards to be met by the member countries for the protection of Intellectual Property (IP).

The need for TRIPS emerged with the need to have uniform laws or standards for IP protection worldwide. The developed countries like, US and Europe lobbied in order to protect the interests underlined of drug companies innovating at regular intervals. By the virtue of TRIPS, the uniformity gets maintained in case of any conflict between the two member countries, wherein, one member country can lodge a complaint to the ‘Dispute Settlement Body’ under WTO, if the other member country does not adhere to the obligations prescribed by TRIPS. Intellectual Property laws stems from the regional laws of a country, as a result of which India and other developing countries failed to match the standards under TRIPS. To curb this issue, a substantive period of 10 years was granted to these countries for amending their domestic laws as per TRIPS guidelines. Thus, the ‘product patent’ got initiated by the virtue of amendment accrued in Indian patent Law, 2005.

Further with the advent of, The Patent and Designs Act, 1911‘process patent’ was allowed in pharmaceuticals, but it did not allowed ‘product patent’. In India since the cost of drugs were very high, it was remained dominated by the other foreign companies, and thus the drugs were mostly imported and not manufactured. Therefore arose the need of reducing the cost of these drugs in the domestic pharmaceutical industries in India. With this objective, the government allowed the ‘process patent’, but not the ‘product patent’, by amending the patent law.

As a result of this amendment, the domestic pharmaceutical companies got their drugs patented in order to make ‘generic copies’ of those patented drugs, which led to the decrease in the prices of drugs and fostered the upcoming growth of pharmaceutical industry. It was in the year 2005, that ‘product patent’ was introduced by India in the pharmaceutical industry which was done to fulfill the obligationunder TRIPS. But there were drawbacks assumed because of product patent, on the grounds varying from the drug prices getting higher to the effect on domestic pharmaceutical industries and the problem that arose in the access of those essential medicines.

To overcome these drawbacks of product patent, Section 3(d) of the Indian Patent Act was amended, which revised the concept of ‘compulsory license’. Product patents succeeded not only in maintaining public health or security but also gave a boost in the launching of patented products in the country by innovators. The ‘mail box’ application under TRIPS aimed to accept the application for product patent. The grant of product patent in 2009 witnessed various infringement suits filed by the foreign pharmaceutical companies against the domestic companies which gave a sudden and significant increase in the patent litigation. The judgments on the patent litigations established jurisprudence in the Indian Patent Act, providing for the patent infringement or patent strategy.

The Supreme Court’s decision in the case of Novartis v. UOI, upheld on the rejection of patent application filed by Novartis for beta-crystalline (salt) which was a form of Glivec. The intellectual property appellate board also upheld the decision for granting compulsory license to NATCO on Nexavar (SorafenibTosylate).

As discussed earlier in this article, the foreign pharmaceutical lobbies demanded that the provision of compulsory licenses and Section 3(d) of the Patent Act, cannot be the complaints under TRIPS; which on the contrary, was believed to be TRIPS complaint under Indian Patent Law. Moreover, as per the views of Indian government, it is on the ‘Dispute Settlement Body’(DSB) to decide whether it is TRIPS complaint or not. The other concerns raised by the foreign drug companies, was regarding the delay caused in the grant of patents accompanied by the lack of transparency in the Indian Patent office. A time period of four to five years is required from the date of filing of application for the patent to be granted or for rejecting the application. Once a patent is granted, it remains valid for 20 years, but the prolonged delay in the grant of patent hampers the ability of the innovator to regain and enhance the discovery and investment.

Nevertheless, Indian patent law does not provide for any extension in the validity of patent, unlike in developed countries like US and Europe. Realizing the delay, the Indian government increased the members examining the intellectual property that could decrease the pendency of patent application. The examiners appointed were given the guidelines for addressing the pharmaceutical patent application which was introduced by the IPO aimed to bring uniformity in examining process. IPO also allowed the data files to be available on the websitein order to increase the transparency and thus increased its accountability.

Soon after the introduction of product patent, it was believed that the big markets and MNCs would take over the control of Indian pharmacy, which was already proven to be unbecoming. The pharmaceutical industry in our country has been dominated by the generic drugs that catch approximately 80 percent of pharmaceutical retail market. In India, the vital reason behind the low market for patented drugs was observed in the life saving diseases. Reason being, that most of the patent litigation was done for the lifesaving drugs.

Thus, by the virtue of difference created after the grant of product patent,it has been pre-conceived that the pharmaceutical patents will be booming. India would also attest the shift in the world of patent litigation, from lifesaving to non-life saving drugs, thus giving ascend on life expectancy and attributing the enhancement in its affluences. Thereby with the growth in Indian pharmaceuticals industries and an emerging shift from generic drugs to innovation drugs, the desire for a patentee friendly environment shall be pondered upon. This cannot be accomplished without a peer revision in the Indian patent laws to see whether the laws meet the desired objectives or these clusters of regulations make mere hurdle in the growth of pharmaceutical industry. The essence of pharmaceutical companies cannot get accomplished unless the government procurement of price control mechanismsis incorporated.

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