Educational importance for post graduate students

1. Course: Intellectual Property Rights
Presenter and Coordinator :
Yogesh Pai
Assistant Professor of Law
National Law University, Delhi
TRIPS and Public Health:
Challenges for Access to Medicines

2. Learning Objectives
The nature of pharmaceutical industry and markets:
what role for IP protection
Why TRIPS
TRIPS provisions on patents and public health
Test and regulatory data protection (Article 39.3)
TRIPS and Public Health: The Indian Context
• Section 3(d) – ever greening concerns
• Compulsory licences on the ground of local working
(Section 84)

3. The nature of pharmaceutical
industry and markets: what role for
IP protection
• 10000: 1 – risk of failure
• IP dependency Taylor and Silberston, 1973; Cohen et
al, 2000; Mansfield, 1986; Levin et al 1987; have
confirmed through surveys
• investment figures are highly contested
• Linear innovation and production
• Average profits higher
High risk in
R&D
investments
and IP
dependency
Highly controlled markets – price controls,
price reimbursements, insurance, marketing and
promotion restrictions etc...
• Price competition
• Price discrimination in developing
countries
• Ethical drug markets – doctor chooses,
consumer pays
Pharmaceutical
markets
• New Chemical Entities in decline
• New Drugs based on biotechnology
• Neglected and orphan drug issues
Innovation
issues

4. Why TRIPS?
⚫ Origins of TRIPS – role of pharmaceutical companies
during the Uruguay round
⚫ Paris Convention seen as insufficient
⚫ TRIPS is Paris-plus (Article 2:1 establishes the relationship)
⚫ National treatment (same treatment principle)
⚫ Priority period- 12 months (no automatic protection,
application must be made)
⚫ Principle of independence of protection)
⚫ TRIPS and Dispute Settlement – a unique chemistry
⚫ Advantages and disadvantages
⚫ Language of balance in TRIPS
⚫ Preamble; Article 7 and 8
⚫ Explicit flexibilities provided by way of limitations ,
exceptions, compensatory use, parallel imports,
enforcement etc...
⚫ Doha Declaration and August 2003 decision – CLs for
export
⚫ Different Transition periods; technology transfer for
LDCs.

5. TRIPS Provisions on Patents and
Public Health
What is a patent- not defined in
TRIPS- but generally understood
as rights to protect new inventions
•“invention” – invention not defined – but
generally understood as a new solution to a
technical problem
•Member generally exclude inventions based on
abstractness, basic scientific theories, products of
nature etc...
•Novelty- local v. Global – not defined
•Comparison with prior art (prior publication and
prior use)
•Reverse infringement test used to detect novelty
•Combination of prior art cannot be used
Patentabil
ity
Criteria
(Article
27:1)

6. Patents- criteria for protection
• Compare with prior art
• Steps taken to reach from a problem to a
solution
• Combined readings of prior art allowed
• Primary (technical advance) and secondary
factors (commercial success etc...)
• KSR v. Teleflex (US 2007) – teaching
suggestion and motivation test not the sole test
for judging combination patents
• PHOSITA test (person having ordinary
skilled in the art)
Inventive
step /
non-
obviousne
ss – not
defined
• Not the invention must have some
commercial utility per se, but must have
some character that allows it to be applied
to any product or process of industrial
character
• UK patent office rejects an invention
based on perpetual motion machine as it
goes against the laws of thermodynamics
Industrial
applicatio
n/
usefulness
- not
defined

7. Patents- criteria for protection
⚫ Article 27:1 (availability and enjoy ability of patent
rights without discrimination)
⚫ Place of invention
⚫ Field of technology
⚫ Whether products are imported or locally produced
⚫ Can lack of local manufacturing than be a ground for
compulsory licence?
⚫ Brazil- US dispute at the WTO DS (undecided)
⚫ Members may exclude based on grounds of ordre
public and morality (Article 27:2)
⚫ Must be based on commercial exploitation and not
inherent problem with the invention (for. E.g. Cloning)
⚫ Members may exclude methods of treatment –
diagnostic, therapeutic or surgical methods for treatment
of human and animals (only methods) US provides
patents but limits liability in cases of infringement by
individual doctors
⚫ US provides patents but limits liability in cases of
infringement by individual doctors. In Pallin case where
a surgeon sued other surgeons for patent infringement ,
caused amendment in 1996 such that in principle patent
rights do not apply to medical activity by physicians etc

8. Patent- exclusions
⚫Members may exclude plants, animals and
essentially biological processes
⚫Cannot exclude micro-organisms and non-
biological and microbiological processes
⚫ Gene patents?
⚫ ACLU v. Myriad Genetics (US Supreme Court 2013)
⚫Review of Article 27.3 (b) –
⚫Work of the WTO secretariat in compiling
information from members on patent protection
for plants and animals/ effective sui generis
regime
⚫Discussions on TRIPS- CBD relationship and
impact on disclosure norms
⚫ India Section 10 of Patent Act – declaration of source of
origin requirement

9. Disclosure; Rights; revocation and
term of protection
• Quid pro-quo of the patent system –
teaching and enabling function
• Best mode disclosure
• As on the date when the application was
made
• Invention must be able to be performed by
ordinary people having skilled in the art
Article 29 – disclosure
• Reversal of burden of proof
in cases of process patents
(Article 34)
Article 28- rights of
patent owners for
products and
processes, including
rights to assign or
transfer
• No grounds mentioned
for revocation
Article 32-
Revocation/ forfeiture
– opportunity for
judicial review –
Term of protection- 20 years from filing (Article 33)

10. Limited exceptions
• Be limited
• Not unreasonably conflict with the
normal exploitation of the patent
• Not unreasonably prejudice the
legitimate interest of the right holder
taking into account interests of third
parties
Limited
exceptions
(Article 30)
Three Step test
Examples: research exemption, regulatory review etc...
• Stockpiling exception- (not valid-
because not limited)
• Regulatory review exception – (valid-
due to the nature of the requirement
and compliance of article 30)
Canada-Patent
Pharmaceuticals
(WTO Dispute
Settlement)

11. TRIPS
• Only conditions but no grounds
mentioned
• Compensation by payment of
adequate remuneration required
• Can also be used for judicially
determined anticompetitive
practices
• Certain procedural compliance
required
• Such use must be predominantly
for domestic use (Article 31(f))
• Compulsory licences for export
purposes only
• Paragraph 6 of the Doha
Declaration on Public Health
• August 2003 decision and Article
31 bis Amendment
Article 31
(other uses
without
authorisatio
n)-

12. Test and regulatory data protection
(Article 39.3)
Article 39: Protection of undisclosed
information
Article 39.3: Members, when requiring, as a condition of
approving the marketing of pharmaceutical or of
agricultural chemical products which utilize new
chemical entities, the submission of undisclosed test or
other data, the origination of which involves a
considerable effort, shall protect such data against
unfair commercial use. In addition, Members shall
protect such data against disclosure, except where
necessary to protect the public, or unless steps are taken
to ensure that the data are protected against unfair
commercial use.
India does not have a regime for data exclusivity but
allows permissive reliance

13. The Indian Context
• Pharmaceutical IP policy is
generally aligned with domestic
concerns of access to medicines and
growth of the generic industry
India’s approach to TRIPS
implementation in the area
of pharmaceuticals is
‘measured’ and ‘cautious’
• Indian pharmaceutical industry-
largely a generic industry- is 4th in
volume and 13th in value
‘Pharmacy of the
world’
India led Uruguay round TRIPS negotiations for
advocating flexibilities - primarily Article 31 (other
uses without authorization)
Product patent regime for pharmaceuticals from
2005
India figures in USTR Section 301 Priority watch
list (2014)
Out of Cycle Review – September 2014
India has used various flexibilities in the TRIPS
Agreement

14. Focus of the discussion is on
two recent issues
• Novartis v. Union of India
(Supreme Court 2013) –
challenge to Section 3(d) of
the Indian Patent Law
TRIPS
consistency
of India’s
regime for
pharmaceuti
cal subject-
matter
eligibility/
patentability • Bayer v. Union of India
(IPAB Tribunal 2013 and
Bombay High Court 2014)-
challenge to grant of
compulsory license on
several interrelated
grounds
TRIPS
consistency
of India’s
first
compulsory
license

15. Section 3(d)- the “ever-
greening” phenomenon
Nature of section 3(d): Ever-
greening concerns– subject matter
exclusion based on mere discovery
of new form of known substance,
new use of known substances
unless enhanced efficacy is shown.
• Declining productivity in innovation
of New Chemical Entities
• EU Pharmaceutical Sector Inquiry
report: “individual medicines are
protected by up to nearly 100
product-specific patent families,
which can lead to up to 1,300 patents
and/or pending patent applications
across the Member States”
• Ever-greening creates high entry
barriers for generic drugs- concerns
of competition law or patent law?
Ever-
greening
not a pure
Indian
concern:

16. Supreme Court in Novartis
(2013)
• invention was anticipated
based on fact that it could
not distinguish between
its new salt form and its
old salt form (which was
marketed) in terms of
enhanced bioavailability
• such properties, although
leading to enhanced
bioavailability, may or
may not have any
therapeutic effect.
(properties such as
beneficial flow properties,
better heat stability or
lower hygroscopicity )
Enhanc
ed
efficacy
-
therape
utic
benefits
require
d

17. India’s first Compulsory
License
Article 31- Conditions for “other uses without
authorization”- no grounds, only conditions
• Prices not ‘reasonable’ ( Bayer charged US $
5500 p.p.pm)
• Reasonable requirements of the public not
met (Bayer catered to only 2% of the patient
population)
• Non-working (Bayer didn’t locally
manufacture the drug, nor did it license in
India)
India granted 1st CL
on Bayer’s drug
Nexavar in 2012 on
three grounds:
• IPAB modified some parts of the order ,
including the interpretation of local
working provision
Decision of the
government to
grant CL upheld by
an appellate judicial
Tribunal (IPAB
2013 and Bombay
High court 2014)

18. Summar
y
Unique nature of pharmaceutical industry and its IP dependency must
be considered for arriving at optimal IP policy
Involves effects on price based competition, price
discrimination
Innovation landscape is changing
TRIPS provisions on pharmaceutical during the Uruguay round
explains the use of private power
TRIPS plus Agreements are on the rise
TRIPS is Paris-plus
TRIPS achieved certain key results by linking dispute settlement
Product patents must be protected... Few exclusions allowed
Limited exceptions and compulsory licences allowed
Special and differential treatment for LDCs through transition
periods
Export licences to resolve public health issues allowed
Indian context unique due to extensive use of TRIPS
flexibilities