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2017-18 Final Draft: Dr. Ram Manohar Lohiya National Law University
2017-18 Final Draft: Dr. Ram Manohar Lohiya National Law University
2017-18 Final Draft: Dr. Ram Manohar Lohiya National Law University
2017-18
Final Draft
IPR-II
A research project of such great scope and precision could never have been possible without
great co-operation from all sides. Contributions of various people have resulted in this effort.
Firstly, I would like to thank God for the knowledge he has bestowed upon me.
I would also like to take this opportunity to thank Priya Anuragini ma’am without whose
valuable support and guidance, this project would have been impossible. I would like to thank
the library staff for having put up with my persistent queries and having helped me out with
the voluminous materials needed for this project. I would also like to thank my seniors for
having guided me and culminate this acknowledgement by thanking my friends for having
kept the flame of competition burning, which spurred me on through the days.
-sd
Srijan Jha
Contents
Acknowlegdement ..................................................................................................................... 2
Widening the Scope of Section 3(d) of the Patent Act, 1970. .......................................... 13
Conclusion ............................................................................................................................... 17
Cases
Statutes
Other Authorities
- New Jersey Department of Health and Senior Services, ‘Hazardous Substance Fact Sheet’,
(last accessed on 12/10/2017) http://nj.gov/health/eoh/rtkweb/documents/fs/1525.pdf ....... 9
Black’s law dictionary ............................................................................................................. 12
E Buchdunger and J Zimmerman, “The .................................................................................... 6
Ghaiyur Alam, Patent Eligible Products and Processes: Legal Perspective and Reforms, 3-5
R.M.L.N.L.U.J. (2011-2013) 66 .......................................................................................... 14
Harekrishna Ashar,The Supreme Court on Therapeutic Efficacy and Section 3(d) of The
Patents Act, 1970, Volume 1, Issue 1, RGNUL Student Law Review 172, at page 178-179.
.............................................................................................................................................. 12
Phosphorous Pentachloride (accessed on 15th October,2017)
https://pubchem.ncbi.nlm.nih.gov/compound/phosphorus_pentachloride#section=Patents, 8
Structure of the law
What does a patent protect? The simple answer to this question is that a patent protects an
invention, which is a new product1 or process involving an inventive step and capable of
industrial application.2” The present law provides the meaning of nearly all but one elements
of invention, which is nature of ‘product or process’. This silence of the Patents Act, 1970 as
to meaning of “product” or “process” seems to be problematic. This legislative silence has
not been noticed either by the judiciary or by the academia. The most famous attempt in this
regard, Novartis AG v. Union of India3came on April 1, 2013. Not only has a lot of time and
effort passed after this landmark judgement was decided, but also the answers sought have
been so sought in the light of either public welfare4 or economic liberalisation for foreign
players5, and has clearly missed the point of why or why not evergreening be considered or
not considered by using an equitable yardstick which has three thresholds, namely novelty,
inventive step and utility. Section 3 stipulates all the conditions, falling under which a subject
matter could not be considered as an invention and hence cannot be granted patent.
Section 3(d), which seeks to eradicate the aspect of evergreening6, currently reads as under:
“3. What are not inventions:- the following are not inventions within the meaning of
this act:
(d) 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 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.”
1
The Patents (Amendment) Act, 2005 § 4.
2
The Patents Act, 1970 §2(1)(j).
3
Supreme Court Civil Appeal No. 2706-2716 of 2013.
4
See- Shamnad Bhasheer and T Prashant Reddy, The “Efficacy” of Indian Patent Law: Ironing out the Creases
in Section 3(d),(2008) 5:2 SCRIPT-ed, at page 265.
5
See- Tatum Anderson, Rejected Novartis Cases Leave India’s TRIPS Compliance Unchallenged (Aug 8,2007,
last accessed on Oct 27, 2017) https://www.ip-watch.org/2007/08/07/rejected-novartis-cases-leave-indias-trips-
compliance-unchallenged/.
See also- Harsha Jeswani, Analysis Of Novartis A.G. vs. Union Of India, (Feb 5,2016 last accessed Oct 24,
2017) <https://blog.ipleaders.in/analysis-novartis-g-vs-union-india/>
6
“Evergreening” is referred to a situation where the pharmaceutical companies extend their patent by another 20
years for mere reformulations or other itineries of the drug, without necessarily increasing the therapeutic
efficacy of the drug,
Section 3(d) stipulates that a new form of a known substance would be patentable only when
the new substance shows enhanced efficacy comparing with known substance. The key issues
in interpreting section 3(d) could be: -
The hoopla over section 3(d) of the Indian patent act is that the word enhanced efficacy is not
backed by strong procedure to determine the efficacy of a particular drug. It depends on the
whims and fancies of the patent controller to determine the efficacy of a particular drug.
When the question arises to decide the efficiency of a life-saving drug like in the case of
Novartis’ Glivec, the decision of the controller seems to go into the favour of public health
although this biasness is obvious because the main aim of a state is welfare of its denizens.
But this at some point seems arbitrary as the pharma companies invest lot of funds in their
research and development department to develop lifesaving drugs. As in this case Novartis
did, the Zimmermann’s drug Imatinib was a freebase which had anti-tumoural properties that
can be used to cure cancer basically leukemia (blood cancer) and it was decided that the beta-
crystalline imatinib mesylate was the enhanced version of the freebase as the PHOSITA in
this case could not make the beta-crystalline using the freebase. So, Novartis stands true on
the ground of novelty, merely rejecting the Novartis’ application on the ground of the
enhanced efficacy was not the correct decision, but we can’t deny the fact that when Novartis
got the EMR (exclusive marketing rights) it increased the price of the drug by 20 times which
in itself vitiated the aim, for which such drugs are manufactured i.e. public welfare, this
objection of increasing prices destroyed the claims of Novartis.
Although the company who has invested such a huge amount of funds in its r&d shall have
the right to get the money back and make profits as at the end of the day earning profit is the
main target of such companies.7
7
See R Capdeville “Glivec (STI571, Imatinib), A Rationally Developed, Targeted Anticancer Drug”
Nature Reviews Drug Discovery 1, 493-502 (July 2002). See also E Buchdunger and J Zimmerman, “The
Story of Gleevec” (last accessed 20th Oct, 2017)
http://www.innovation.org/index.cfm/StoriesofInnovation/InnovatorStories/The_Story_of_Gleevec.
Structure of Case
The only one time that Gujarat High Court gave a decision on s3(d) of The Patents Act, 1970
was in the case of Rajnikant Devidas Shroff v. Pharma Chem8, and the same was by the
virtue of s. 104 of the Patents Act, 19709. The plaintiff had alleged a violation of the patent it
had by the hands of the defendant, and then went on to claim (i) injunction from using the
patent, (ii) either a decree of Rs 1,00,00,000 or to render a faithful accounts of the profits
earned, and (iii) appointment of a Court’s Commission to look into the matter. Against this
the defendant filed a counter-claim alleging that the patent should have never been given in
the first place, and that no interim or final action should be taken against him.
PCL5 is a white to pale yellow powder or fine granular fuming mass with a pungent odour
which reacts violently with water. In the presence of moisture, it decomposes with heat. Prior
to this invention, the following procedures were used for manufacturing PCL5:
The defendants even came up with a method of production of PCL5, that was done by a
series of reaction of phosphorous trichloride, using the catalyst of carbon tetrachloride and
thereby producing a form of PCL5 which resembled the patented object. The same was being
carried out since around 2004. These two parties, the plaintiff and the defendant happen to be
the only producers of such an object in the area of Valsad, Gujarat.
14
Id. at para 4.
15
The Patents Act, 1970, §53.
16
Old patents are termed ‘good patents’ if they have well held their sanctity and utility in the industrial arena,
and the courts have a lenient approach favouring them when it comes to decisions on infringement and
injunctions. See- Shillito v. Larmuth and Co., 1885 (II), Reports of Patent Cases, Page 1, Chancery Court of the
County Palatine of Lancaster, Manchester District.
17
It includes posttraumatic stress disorder medicines. See- New Jersey Department of Health and Senior
Services, ‘Hazardous Substance Fact Sheet’, (last accessed on 12/10/2017)
http://nj.gov/health/eoh/rtkweb/documents/fs/1525.pdf .
The crystalline form as provided by the learned advocates in the cause is better than the fluid
form for the reason that the same can be easily mixed and integrated into medicines.
It was also alleged that the defendants were in close contact with one of the chemists of the
plaintiffs and the same had been the bridge between the infringement of the patent and
changing of hands of the patent process.
Interim Decision
This discussion was greatly moulded by the discussions on injunction to be laid or not. Mr.
Thakore, learned advocate of the defendant relied on the decision of Farbwerke Hoechst
Aktiengesellschaftvormals Meister Lucius &Burning Corporation v. Unichem Laboratories19,
wherein it is held that in an action for infringement of plaintiff's patent in respect of the
process of manufacture of a medicinal product where the defendants admit that the drug
which they manufacture under different trade name is the very drug in respect of which the
plaintiffs have obtained their patent, a presumption that the defendants drug has been
produced by the patented process of which it is alleged to be an infringement can be drawn
against the defendants under the general provision contained in Section 114 of the Evidence
Act. Moreover, though the general burden of establishing the case of infringement
undoubtedly rests on the plaintiffs in accordance with Section 101 of the Evidence Act, the
burden of providing a particular fact, viz., the process by which the defendant's product is
being prepared by the defendants would be on the defendants, since that is a fact “especially”
within their knowledge within the terms of Section 106 of the Evidence Act. It is impossible
for the plaintiffs to know by what precise process that product is being prepared by the
defendants and it is precisely to that sort of a case that Section 106 is intended to apply. The
Court therefore took the view that in view of the admissions made by the defendants, it
18
Supra 9 at para 8.
19
A.I.R. 1969 Bombay 255.
became unnecessary for the defendant to lead any evidence at all to prove infringement on
the part of the defendants. As stated in Section 58 of the Evidence Act, facts which are
admitted need not be proved.20
On the other hand Mr. Joshi, counsel for the petitioner21 relied on the decision of Dhanpat
Seth v. Nil Kamal Plastic Crates Ltd.22, wherein it was held that mere fact that the device is
made of polymeric material instead of bamboo is not an inventive step involving any novelty.
There is nothing new about the process of manufacturing. Therefore mere grant of patent in
favour of the plaintiffs by itself does not mean that plaintiffs were entitled to any injunction.
This factor can be taken into consideration and would be a relevant factor but grant of patent
would not ipso facto entitle defendant to grant of an junction without taking into
consideration other relevant factors. In fact, Section 107 clearly provides that in any suit for
infringement of patent every ground on which it may be revoked under Section 64 shall be
available as a ground for defence.23
Till now, the Supreme Court has only granted the leave and ordered a conclusion of all the
matters aligned to this cause. This was done in 2014, when the case reached the Supreme
Court in the form of a SLP25. For the lack of comment on this case, the Supreme Court has
applied the doctrine of merger26 in this case.
20
Supra 9 at para 23.
21
With respect to the Supreme Court decision.
22
A.I.R. 2008 Himachal Pradesh 23.
23
Supra 9 at para 31.
24
O.J. Appeal No.12 of 2009 in Civil Suit 1 of 2005 decided on March 3, 2009 (Gujarat).
25
Pharma Chem v. Rajnikant Devidas Shroff (2014) 16 S.C.C. 380.
26
When a higher court’s judgement is limited, the operative part of the lower court’s judgement is merged in the
final judgement. This is known as Doctrine of Merger. See- S. Shammugadel Nadar v. State of Tamil Nadu,
(2002) 8 S.C.C. 361, para 10.
Therapeutic efficacy and beyond
Dictionary meaning to efficacy means “effectiveness” i.e. likelihood of achieving desired end
by expending effort. In medicine, it means a treatment’s or vaccine’s effectiveness in curing,
preventing or lessening the effect of disease.27 The sections 3(d) circumnavigate the word
efficacy as u will get the result, what interpretation u put to this word. More specifically the
issues is whether the word efficacy should be interpreted to mean “therapeutic efficacy” or it
should be give a wider interpretation to include any kind of advantageous property
attributable to the new form. According to Novartis, Section 3(d) contravenes the TRIPS
Agreement. We see following reasons as potential reasons of computability. Firstly, Section
3(d) may render the Indian patentability system more stringent than what Article 27 of TRIPs
requires, Secondly, by focusing on chemicals and pharmaceuticals products, Section 3(d)
may be considered discriminatory as to the field of technology.
After the Madras High Court decision28, which said that efficacy can only be read under the
head of ‘therapeutic efficacy’29 and thereby turning this provision into a law restricted for
pharmaceutical industry, there was a tiff to redefine the stance. The Supreme Court in that
case did not do so as it had bigger problems to answer in a very short span of time. But the
present case at hand can be one of liberating and widening standards that puts this provision
back on to being a general provision.
In the case of Golchan Industries ltd v. Cadila Health and Others30, the court opined that
s.3(d) is not a mere reproduction of the provision in the ordinance, but a result of
Parliamentary Debates31 and hence has a value that shall not be so judiciously interpreted to
restrict it to a certain field. It takes all fields of technology and not just pharmacology and the
only restriction is the requisite of ‘efficacy’ 32. This case even saw a general statement made
as a direction to the Assistant Controller of Patents to look beyond the point of law provided
for efficacy, for a proper enquiry, if the condition speaks highly of inventive steps. 33 Since
this case the Bombay High Court has not decided upon the merits of s. 3(d).
27
Black’s law dictionary
28
Novartis A.G. v. Union of India (2007) S.C.C. OnLine Mad. 658.
29
Id. at para 181. See also- Harekrishna Ashar,The Supreme Court on Therapeutic Efficacy and Section 3(d) of
The Patents Act, 1970, Volume 1, Issue 1, RGNUL Student Law Review 172, at page 178-179.
30
(2009) S.C.C. OnLine Bom. 1701.
31
Id. at para 11.
32
Id. at para 11 and 13.
33
Id. at para 16.
Basically, the efficacy explained in section 3(d) cannot be limited to only pharmaceuticals
industries as it has already been cleared by the Indian government in 2007 at WTO Trade
Policy Review(TRP) that the amendment act 2005 seeks to balance IP Protection with public
health, national security, and the concerns of public interests. So limiting the
interpretation only to pharmaceutical patents does not suffice the intention behind enacting it,
as the interpretation given by various courts around the country is that the word efficacy used
in this section means only therapeutic efficacy but it will narrow down the interpretation as
(some foreign court decision.), which should be widen up to include efficacy of any
substance which has been granted patent and there is some enhancement in its properties
rather just improvement in its physical properties.
PCL5 though is used in manufacturing of medicines and that is the main business of the
plaintiff and the defendant provides chemicals for the same, but it rather fits into the
definition of an industrial chemical37, for it is needed for a further production and has got no
direct therapeutic value38.
In a very centric condition, we can even say that crystalline form of PCL5 is better only
because it gets mixed and formulate easily into the medicines.The same does not add on to
34
The Patents Act, 1970 § 2(ta)- "pharmaceutical substance" means any new entity involving one or more
inventive steps”.
35
The Patents Act, 1970,§ 92A(3)
36
The Patents Act, 1970, § 92A(3), See-Explanation.
37
Which is defined in the USA and Australia. The Australian definition, as taken from Section 5 of Industrial
Chemicals (Notification and Assessment) Act 1989, has been provided in the preceding paragraph.
38
See- New Jersey Department of Health and Senior Services, ‘Hazardous Substance Fact Sheet’( last accessed
Oct 12, 2017) http://nj.gov/health/eoh/rtkweb/documents/fs/1525.pdf.
the ‘therapeutic’ value as much as it adds on to the industrial process of its production and
value of its product.
To point that there is a higher degree on the head of the defendant as well to prove that
section 3(d) applies and hence the same becomes difficult to be proved, an example can be
taken. In order to realise the therapeutic efficacy IPAB has held that applicants of revocation
of any patent are required to prove experimental data of clinical nature, done on human
beings in support of therapeutic efficacy.39
Hence, it is not required to read PCL5 under the head of a medicine to attach a theory of
medicinal value and then implicate s.3(d) of the Patents Act, 1970. The provision is broad
and can well take industrial chemicals, a better object for the grant of patent and also was the
first US patent.40
Now that there are provisions relating to the gatekeeping, we need to look at two aspects.
First is the one of restrictions on a wider approach.
There is a widespread and growing concern that patents hinder access to life saving drugs in
developing countries. The same is because of lack of R&D and parlance of generic drugs,
39
Tianjin Dishlin Investment Holding v. Controller General (2012) S.C.C. OnLine I.P.A.B. 101, para 5.
40
“In the US Law, the first Patent was granted to Samuel Hopkins in 1790, who had devised an improved
method of making Potash, America’s first industrial chemical. This was signed by President George
Washington, Secy of State Thomas Jefferson and Attorney general Edmund Rudolph.”- Board of Trustees of the
Leeland Stanford junior University v. Roche Molecular Systems,(2011) S.C.C. OnLine U.S. S.C. 52, part IIA.
41
US Patent Act, 1952 §101.
42
Ghaiyur Alam, Patent Eligible Products and Processes: Legal Perspective and Reforms, 3-5 R.M.L.N.L.U.J.
(2011-2013) 66 at page 68.
which implicate higher rates from the manufacturers.43 Such a gatekeeping will be beneficial
as it will be more difficult to indulge in evergreening in India.44 The amended S. 3(d)
appears to be limited to only new forms that demonstrate an increase in known efficacy. It
does not, therefore, apply to a case where the new form is found to have a completely
different use (and not just an increased efficacy vis-à-vis the known use). If the intention
behind this provision is to heighten the obviousness standard and weed out frivolous and
fairly obvious patents, this seems a rather illogical result, as a new use for a new form is
certainly more inventive than a mere showing of an increase in known efficacy.45
But this will keep leading us to the same question as that we had in the Novartis AG and are
having right now. Even the landmark judgment could not a middle path and gave the scope
for the same cause to heard again in the same court.46
Delhi High Court on the other hand can be seen to be directly influenced by the two Novartis
judgements, and have very clearly dealt a few instances. The principle the judges have opined
is that a derivative of a known substance/compound cannot be patented49. This is believed to
be the effect of a very simple case that any derivative will certainly have some new effects,
which are beneficial but not clearly out of the box, considering the attributes of the
substance/compound it is a derivative of, and unless the rules constructing this setup are not
stringent, evergreening cannot be done away with. The first question that arises in regard to
43
Prof. A. Lakshminath and Dr. Ajay Kumar, ‘Evergreening of Patents’, 16 (1stedn, Satyam Law International
2014).
44
Ibid. page 21.
45
Shamnad Bhasheer, India's Tryst with Trips: The Patents (Amendment) Act, 2005, 1 I.J.L.T. (2005) 15 at page
25.
46
“Inventive step”. Press Trust of India, Natco Opposes Novartis' Patent Claim, (last visited Oct 18, 2017)
http://inhome.rediff.com/money/2005.jun/20natco.htm .
47
Novartis A.G. v. U.O.I., (2013) 6 S.C.C. 1.
48
(2009) S.C.C. OnLine Bom. 1701.
49
Roche v. Cipla (2012) S.C.C. OnLine Del. 4704, para 11.
the subject of the utility of a patent understands the quantum of utility required to support a
patent. Reference may be made to the effect that in the absence of any promise in the
specification that a definite degree of advantage would result from the use of the invention,
the amount of utility required to support a patent is very small.50 It is further stated in the said
passage that it is, in particular, not necessary that the invention as described should be
commercially useful, unless the specification promises that it would be, and that it is
sufficient that that invention should, by reason of the features that distinguish it from earlier
proposals, be of some use to the public.51
Lesson learnt?
Patent Application No.1577/Del/1996 was refused, inter alia under the provisions of s3(d).
The Controller in his decision dated 12th June, 2007 held that “the present invention provided
a new form of a known substance either in anhydrous form or hydrated form III of
Atorvastatine having the same therapeutic activity in the same field. It only creates more
improvement in physical property. Hence it could not be provided a patent.53
Clearly, a stance, similar to the PCL5 has appeared and the Patent office has understood a
minor mistake it had done earlier. It has denied the patent protection of a chemical which is
used as a medicine for controlling of the total Cholesterol and preventing cardiovascular
diseases54, and is another important life-saving drug, a patent on which could have been
against the cause of the patients. This has been done for the reason that one is just a next-
level form of pre-existing cause and the result will not change the position as it will still be a
new use of a known substance.55 Similarly, combination of two compounds is also not
50
Farbewerke Hoechst v. Unichem Laboratories A.I.R. 1969 Bom. 255.
51
Bristol Myers SuibbCompany v. JD Joshi (2015) S.C.C. OnLine Del. 10109, para 51.
52
(2012) S.C.C. OnLine I.P.A.B. 101, page-5.
53
Draft Manual of Patent Practice and Procedure, by the Controller General of Patents, Designs and Trademark,
India (3rdedn, 2008) page-63.
54
‘Atorvastantine 10 mg film coated tablets’, www.medicines.org.uk/emc/medicine/33640, ( accessed 30th Oct,
2017).
55
Mosanto Technology v. The Controller of Patents and Designs, (2013) S.C.C. OnLine I.P.A.B. 106, para 26.
permissible to be provided patent. In cases of combinations, the authorities can go forward
with ignoring the application if there is some particular new innovation and novelty.56
56
Ajanta Pharma v. Allegram Inc. (2013) S.C.C. OnLine I.P.A.B. 127, para 11.
Conclusion
Just one conclusion comes out of this arrangement and that is the recognition of the problem
at hand. The problem is hotly debated and seldom answered, and this is the best chance that
the Supreme Court has had in a while to answer the question of when to patent and when to
not. Such a decision is not just the characterization for the judicial bodies, but would rather
form an integral aspect in the analysis of each application that claims patent.
As to what the answer should be, clarity could be found only by construing the structure of
the foreign bodies trying to regulate impartially. TRIPS agreement should be referred to and
dealt more seriously than before. Such constructions would be beneficial for the sole cause of
ease of trade in India and respect to the R&D works that other Companies have taken.
Lastly, the word’ efficacy’ has been read very restrictively and the same is the root cause of
all the problems. Efficacy should be left back to its literal meaning and not be restricted to
only pharmaceuticals.