Natco vs Pfizer: Today's Hearing at the Patent Office

The Assistant Controller (Delhi Patent Office), Mr Dev Karar heard counsels appearing for Natco and Pfizer today. The hearing was limited to the interlocutory petition filed by Natco challenging the legality of the "hearing" granted to Pfizer. The Asst Controller stated that he would issue a decision on this in about 10 days or so. For our previous posts on this case, see here, here, here and here.

Interestingly, I had interviewed Dev Karar some years back for a paper that I was doing on the Indian patent office, using the backdrop of the Dimminaco decision--a case where the patent office had refused a patent on a biotechnology process, on the grounds that it involved "living" matter--the Kolkatta High Court reversed the decision of the patent office, holding that nothing in the Indian patent regime foreclosed the possibility of patenting "living matter". Mr Karar gave me some very insightful comments then--since then he has risen through the ranks and is now heading the Delhi patent office. I'm sure that we will have a well reasoned decision in India's first Doha CL case.

Anyway, for those interested in the Dimminaco decision (which boosted biotech patenting in India) and the broader aspects of how patent decisions are made in India, see the paper here titled "Policy Style Reasoning at the Indian Patent Office."

Natco vs Roche (Doha License): First Day

I've been given to understand that Natco's counsel presented arguments before the patent office today. However, it appears that most of the arguments were centered around the interlocutory application filed by Natco, opposing the move by the patent office to hear Roche/Pfizer. Tomorrow, the patent office will hear arguments in this regard from counsels representing Pfizer/Roche.

It is only after they decide on this interlocutory application (i.e. that parties cannot be heard under section 92A) that the matter will be heard and decided on the merits. Our earlier blog posting on this contained some discussion on whether or not a "hearing" was permissible under section 92A.

While a strict reading of the section does not permit a hearing, the denial of such opportunity could result in a writ petition from Pfizer/Roche alleging that principles of natural justice (audi alteram partem) had been violated. Particularly since the patent office has to decide on appropriate royalty rates. Without there being a pre-determined fixed formula in India (unlike Canada), it may be difficult to counter Pfizer/Roche's contention that the absence of a hearing/representation (that might have helped establish the "economic value" of patent and the impending CL), seriously prejudices the rights of Pfizer/Roche.

Interestingly the patent office has just released an updated version of their draft manual. We are very happy to note that, consistent with principles of transparency and public participation, they have called for comments. So please do send in your comments by the 25th of March, 2008.

This manual has an entire section on the Doha license. And from this manual, it appears that at the first stage, the patent office has to grant a license, if a "prima facie" case is established by Natco. And that they are to grant a hearing, if they decide against Natco. But such hearing shall only be for Natco and not for Pfizer/Roche. I reproduce sections of this manual below:

"Section 92 A :Compulsory licence for export of patented pharmaceutical product in certain
exceptional circumstances.

18.3.1 The section was introduced by The Patents (Amendment) Ordinance, 2004 which came into force on 1st January 2005, to provide for grant of compulsory licence by the Controller for export of patented pharmaceutical product in certain exceptional circumstances, where compulsory licence has been granted by the country to which the export is intended. This provision was further amended by The Patents (Amendment) Act, 2005, to allow grant of compulsory licence even in cases where the importing country has by notification or otherwise, allowed importation of patented pharmaceutical products from India.

18.3.2 The procedure for obtaining the compulsory licence is laid down in Rules 96 and Rule 97.

18.3.3 This provision is introduced to address the public health concerns of the countries having insufficient or no manufacturing capacity in the pharmaceutical sector to implement the decision of the TRIPS council on Para 6 of the Doha Declaration on TRIPS Agreement and Public Health. This section lays down the conditions that are required to be fulfilled, when the compulsory licences for export purposes will be available. The compulsory licence is
available only for:

(a) The patented pharmaceutical product
(b) Manufacture and export to any country having insufficient or no
manufacturing capacity in the pharmaceutical sector
(c) The product addressing the public health problems in such country.

18.3.4 The explanation under this section technically defines the scope of the pharmaceutical product that comes under the purview of this section. The pharmaceutical product covered under this section is any patented product or product manufacture by a patented process including all such ingredients that are necessary for manufacturing of such products. The diagnostic kits required for the use of the patented product are also covered.

18.3.5 The product on which the applicant has either obtained the compulsory licence from importing country or the importing country has by notification or otherwise, has allowed Importation of patented pharmaceutical products from India.

18.3.6 The application for compulsory licence shall be filed in the office where patent has been granted. This application shall be made on Form 17. The applicant shall give the ground relied on for making the application. He shall also specify the nature of his interest and the terms and conditions of the licence he is willing to accept. This condition is not applicable, where the application is made by the Central Government.


18.3.7 The applicant shall furnish the certified copies of the documents giving details of documentary evidence in support of his interest and the ground on which the application is made. Fee for filing this application Rs. 1500/- for natural person and Rs. 6000/- for other than natural person either alone or jointly with natural person.

18.3.8 The Controller shall ascertain whether a case is made out or not for grant of compulsory licence.

18.4 Where on consideration of the evidence the Controller is satisfied that the prima facie case has been made out he shall proceed to pass an order for grant of compulsory licence with following terms and conditions:

i. Specify the product for which the licence has been granted.
ii. Specify the quantity of product to be exported based on the need of the importing country.
iii. Specify the distinguishing feature of the product and/or packages:-
The distinguishing feature of the product may be colour/shaping of the product or packages provided the Controller shall take into consideration that there is no significant impact on price.
iv. Specify the importing country and the quantity to be supplied to each country.
v. Specify the remuneration to be paid to the patentee: The Controller determines the remuneration taking into account the economic value to the country of the use that has been authorised by the Controller.
vi. The Controller shall direct the licensee to post the information relating to the quantity of the product supplied under licence to each destination with its distinguishing features on the website before the commencement of the shipment.

The Controller then publishes the following information in the official
journal:-
(i) Patent number
(ii) Name and address of the licensee
(iii) Quantity allowed for manufacture and export
(iv) List of the countries and the quantity to be supplied to each country.
(v) Duration of the licence.


18.5 If the prima facie case is not made out

18.5.1 Where on consideration of the evidence the Controller is satisfied that the prima facie case has not been made out he shall proceed as per the provision of rule 97

18.5.2 The procedure for dealing with the cases where the prima facie case is not made out is given in rule 97(1). According to this rule the Controller is required to notify the applicant that a prima facie case has not been made out and if the applicant so desires he may request the Controller for hearing before the Controller within one month from the date of issue of a notification. If the applicant fails to make such a request within the specified time the Controller shall refuse the application.

18.5.3 Where the applicant make a request to the Controller for hearing, the Controller shall proceed as per the provisions of rule 97(2) and hear the applicant and pass an order for grant of licence or refusal of licence depending on the merits of the case.

18.5.4 This provision provide that the grant of compulsory licence under section 92A (1) and section 92 A(2) has no effect on the compulsory licence granted under other provisions of the Patents Act.

18.5.5 In case of compulsory license for export of patented pharmaceutical products to any country having insufficient or not manufacturing capacity to address public health problem, the application will also have to be made on form 17, and the compulsory license will be granted, immediately under Section 92 A of the Act."

SpicyIP Tidbit: Sun challengesJ&J

Sun Pharma has as of February 28th, 2008 decided to file a post grant opposition with the Mumbai patent office against a product patent extension granted to Johnson & Johnson's Risperdal, used to treat psychological disorders and schizophrenia.

The patent, granted to Janssen Pharmaceutica, a group company of Johnson & Johnson, on July 20, 2007, with patent number 208191 relates to sustained-release particles of risperidone.

Sun Pharma has been marketing a generic version of this drug for the last few years in India under the brand name Sizodone and has moved against the patent on Risperdal, that is due to expire in the US on June 29, 2008. News reports state that the extension has only been sought in India and not in the US.

SpicyIP Tidbits: Interpol to Step in to Protect IPR

Tightening the noose on counterfeiting of goods for protection of IPR, a Database on International Intellectual property (DIIP) was launched at a Confederation of Indian Industry (CII) forum in Mumbai, as part of a joint initiative by the Interpol and the US Chamber of Commerce. Laying emphasis on the importance of protection of IPR in countries like India and China, Ron Noble, secretary general of Interpol and David Chavern, executive vice president and chief operating officer of the U S Chamber of Commerce felt that:

"With India graduating to a worldclass innovator, protection of IPR has become all the more important"

According to Mr.Chavern, DIIP would prove to be useful in identifying links between criminal groups during investigations and also in production of global strategic reports. An article from the TOI states that one of the key functions of DIIP will be to maintain reliable data on the scale of counterfeiting and piracy to determine the nature of crimes against brand and copyright integrity In fact, trade bodies from 50 countries are already cooperating with Interpol in this endeavour. In the six months of its existence, the database reportedly has details of 5000 entities and 500 cases are already under investigation. May be it is time that India evolved a policy on the lines of the Economic Espionage Act, 1996 of the US.

SpicyIP Tidbits: Pharma MNCs struggle in India

Three years after India's patent law refurbishing exercise, the verdict is out: MNCs are still struggling to carve a sizeable pie of the Indian market share, while domestic pharma majors continue to rule the roost.

A report by Noemie Bisserbe of the ET gives several probable reasons for Pfizer, Novartis and Merck losing market capitalisation over the past three years, including poor pricing strategies and fewer global product launches.

Elsewhere, at an ET summit on the Indian pharma industry, Dr Swati Piramal projects that by 2010, India will have discovered at least five new drugs, and estimates that the cost of innovating a new drug at home was under USD50 million.

And 'Nano' is surely the buzzword of the year in India! Even Kapil Sibal has put his two cents in, of the possibility of replicating the low-cost model in pharma. (The cynic in me refuses to use the word 'success', because the model is yet to be tested in the market, even if only in the automobile sector.)

SpicyIP Tidbits: It’s a Case of Purple Heartburn

Here’s the story so far. AstraZeneca, the Anglo-Swedish manufacturer of prescription drugs had a basic patent on Prilosec (Omeprazole), a drug used to treat gastroesophageal reflux disease (acid reflux) and heartburn. Gastroesophageal reflux disease is the name given to erosions in the oesophagus on account of churning of pepsin in the stomach over a period of time which chips away at the delicate lining of oesophagus. This patent was supposed to expire in April 2001. However, the company came up with a new formulation in the form of Nexium (esomeprazole), also known as the Purple Pill, which protects specific aspects of Prilosec. Apparently,this was done because Prilosec earned the company $5.91 billion in the year 1999 alone.

Nexium too was granted a US patent (US 6369085) which according to the company is scheduled to expire in 2019. However, this patent has been challenged by several companies, notably Ranbaxy and Israel-based Teva Pharmaceutical in separate suits. In fact, Ranbaxy went ahead for a first-to-file status under the Hatch Waxman Act of 1984. This Act is designed to promote generic versions of patented drugs and gives Ranbaxy a 180-day window during which it shall have exclusive marketing rights to the drug on the expiry of the Nexium patent. Also, the USFDA has given a tentative approval to Ranbaxy’s generic version of Nexium. Following the challenge to the Nexium patent, an automatic stay of 30 months was ordered. This stay is lifted automatically at the end of the said period which will be on April 14, 2008 in the case of Ranbaxy and in July 2008 for Teva. It is being speculated that Ranbaxy and Teva Pharma may jointly go for an “at risk” launch.

"At risk" launch occurs when a generic company launches a product after the automatic 30-month stay granted at the beginning of patent litigation between two companies, but before the completion of the case and the expiration of the patent. The danger to the generic company is that if it loses the litigation, it is then liable for triple the damages it would normally incur for patent infringement. But if it wins, the generic company’s drug is on the market faster than a competitor’s. Past experience says that a loss in the Court isn’t sufficiently huge to deter the generic companies which can offset future losses with big gains from early sales. Teva in particular has been using this strategy to its advantage which has emboldened other generic manufacturers.

Rumour mills are working overtime saying that AstraZeneca would probably cut a deal with the challengers, but the company has denied the possibility of any such deal saying that it was confident of winning the case on the merits of the patent. Further, Astra has won seven out of eight patent disputes. However, several industry observers are divided on this issue. According to them, the trend is that companies which lose patent protection on blockbuster drugs protect their markets by introducing single-enantiomer versions of those drugs and most feel that Prilosec and Nexium fit this pattern. Prilosec is a racemic mix of enantiomers, which can be likened to the left-handed and right-handed versions of a molecule. With Nexium, the S-enantiomer has been isolated, which according to AstraZeneca gives it several advantages over the basic patent. Dr. Doug Levine, chief medical officer of the gastrointestinal division at AstraZeneca, opined in 2000 as follows:

“We found that Nexium was metabolized differently than omeprazole. The way the enzymes see the molecule is different. I like to use the analogy of a key in a lock. If you had a mirror image to that key, it wouldn't necessarily fit into the key hole.”

Richard DiCicco, president of Falls Church Technology Catalysts International, too was confident that Nexium is clinically superior to omeprazole at four endpoints: fast healing of reflux esophagitis, fast symptom relief, new approach to long-term management of symptomatic GERD (gastro-esophageal reflux disease) and new approach to helicopylary (the treatment of ulcers caused by bacteria). A few others feel that not every such drug which is an isolated enantiomer receives the same amount of success for it depends on that particular case. For instance, Levabuterol, a single-enantiomer version of Albuterol, an asthma medication marketed by Abbott and Sepracor, came and went without a whimper. Accordingly, without resorting to comparisons, one will have to judge the merits of the drug individually and cannot blindly draw parallels on the basis of success or failure of other drugs.

The complete details are available here.

SpicyIP Tidbits: Basmati 'stirs' up new protests.

Just when India's initiative to protect products was finally beginning to be appreciated by SpicyIP, farmers in Karnataka have begun protesting the recent move to grant the geographical indication to the rice grown in Punjab, Haryana, UP and Uttarakhand alone.

Claiming that this would adversely affect the margin on profits earned by the variety of Basmati grown by them, the farmers have now started protesting, in the hope that they will be included as a part of the GI.

The full article, can be found here.

Free IP Database: The WIPO Magazine!

The World Intellectual Property Organisation's magazine endeavours to inform readers about WIPO-led activities, and to showcase intellectual property, creativity and innovation at work across the world, this issue of the WIPO Magazine covers a wide range of topics like from climate change to a public forum at the WIPO for LDCs.

The WIPO Magazine is currently available free of charge. This can be availed by readers- both online and in print in three languages (English, French, Spanish).

The launch of the magazine is great news for all IP enthusiasts, who are ecstatic about one more database, dedicated to patents, and available easily and inexpensively to readers!

Spicy Tidbit: Injunction granted in HCV TRI-DOT case

J Mitra's company dealing with HCV-TRIDOT( a device for the detection of the Hepatitis C within 10-15 days) has been granted an injunction in its favour preventing Span Diagnostics from making or selling any diagnostic test which might infringe their patent.

"The defendant (Span Diagnostics) and its agents are restrained from manufacturing, selling, offering for sale or in any manner dealing with the impugned product Signal HCV or any other product violative of the plaintiff's (J Mitra's) patent," Justice Sanjay Kishan Kaul said.

The Assistant Controller of Patents and Designs upheld Mitra's patent when it was opposed by Span Diagostics in September 2006. Span Diagnostics manufactures a similar product called Signal HCV.

The High Court has passed the judgement on a lawsuit filed by J Mitra against Surat-based Span Diagnostic seeking injunction against the manufacture of Signal HCV which, J Mitra alleged is a copied device its HCV TRI-DOT. J Mitra through its counsel Pratibha M Singh had submitted that the patent over HCV TRI-DOT, a device for detection of antibodies to Hepatitis C Virus, has been infringed by Span Diagnostic which copied its product.
It was submitted that all components of the plaintiff's (J Mitra) test device HCV TRI-DOT form an integral part of defendant's (Span Diagnostic) product Signal HCV, the suit said.

The full article can be found here. For a little more background check out an earlier post on Spicy IP here. Also for more perspective do check out Sandeep Rathod's opinions here.

The Tale of the Two Patents: SpicyIP in the news.

Our readers are most likely to remember the recent patent blooper with the issue of the same patent to different inventors. This was preceded by SpicyIP's appeal to the Prime Minister to create a database of sorts to prevent exactly these sort of incidents. As a followup to the previous post by Mr. Basheer, CH Unnikrishnan from Livemint not only reports this patent issue, but acknowledging SpicyIP's role in the same- has closely followed the recent developments in the story--

"Adding fresh ammunition to the fight against a lack of transparency and inadequate data searching systems at Indian patent offices, a recent case at the Delhi high court suggests that the Mumbai and Chennai patent offices have granted exclusive rights to identical technologies claimed by two leading consumer durable companies.

The patents under dispute are those granted to Hindustan Unilever Ltd, or HUL (previously Hindustan Lever Ltd), and Eureka Forbes Ltd for gravity-fed water purifiers.

While Eureka Forbes was granted a patent for the product in September 2005 by the Chennai patent office without hearing an opposition filed by HUL, the Mumbai office granted a patent to HUL in 2006 after examining an application filed four years earlier.

HUL has now challenged the decision to grant the patent to Eureka Forbes despite its application for the technology pending with the Mumbai office since 2002, almost two years before Eureka Forbes made its approach.

Indian patent law follows the “first-to-file” criterion for considering grant of patent.

As reported by Mint in a series of articles related to malfunctions at the Indian patent offices, critics hold an incompetent data search facility and poor cross-verification systems responsible for this duplication. An intellectual property blog, SpicyIP, had in December 2007 petitioned Prime Minister Manmohan Singh to take steps to mandate the creation of a database that would eliminate such anomalies.

HUL, one of the top patent holders in India, had petitioned the court that Eureka Forbes had infringed its patent by introducing Forbes AcquaSure in the market. HUL markets a similar product under the brand name Pureit. The four-year delay in granting the patent to HUL was mainly due to the office’s much delayed publication and examination process. HUL’s patent application was published in the patent journal only in May 2005.

Meanwhile, in September 2005, the Chennai office granted Eureka Forbes the patent on its application dated 29 March 2004 and published it in February 2005 in the patent journal without giving HUL a hearing on its pre-grant opposition filed in August that year. HUL also filed a post-grant opposition in November 2005.

Patent applications are published in a journal to ensure there is no opposition or counter-claims.
The post-grant opposition too proved unsuccessful, despite the failure of Eureka Forbes to reply to it within two months. As per Indian patent law, a patent holder should reply to a post-grant opposition within two months or risks losing the patent. Instead, the Chennai patent office granted an extension of two months to Eureka Forbes to make its reply, contrary to provisions.

An HUL writ petition challenging this is pending with the Madras high court.

An official at the Mumbai patent office turned down Mint’s queries on why it took nearly three years to publish HUL’s application and whether the delay was caused by the applicant or by its own offices.

SpicyIP, run by a team of patent experts worldwide, in a recent blog had highlighted that “HUL’s allegations, if proven true, will put the patent office in a spot, as the facts suggest a high level of collusion between the office and Eureka Forbes.”

Spokespersons of both companies declined to comment, saying the issue was sub judice.

Shamnad Basheer, a patent lawyer and an associate at the Oxford Centre for Intellectual Properties, who led SpicyIP’s campaign to petition the Prime Minister, said: “This case is likely to pose some complex jurisprudential problems. If HUL can sue Eureka Forbes on its patent, then the reverse is also possible, i.e. Eureka Forbes can sue HUL on the strength of its own patent. We understand that it has not done so as yet, owing to a restraining order from the Madras high court (which is currently deciding the petition)."

Meanwhile, Eureka Forbes has filed a post-grant opposition challenging HUL’s patent.

Earlier, Mint reported a similar case of Chennai patent office granting a patent to Swiss drug company F. Hoffman-La Roche Ltd for its anti-infection drug, Valcyte, ignoring a pre-grant opposition by two non-governmental organizations— the Indian Network for People Living with HIV/AIDS and the Tamil Nadu Networking People with HIV/AIDS. Ranbaxy Laboratories Ltd, has legally challenged the Chennai patent office’s decision to grant a patent for the drug."

One can only hope that with such a long list of litigation caused solely due to the lack of communication between the patent offices, the PMO will sit up and take notice of the SpicyIP initiative for a database.

India's First Doha Case: Has Nepal Issued a Notitication?

Pursuant to our posts on the Natco's application for a Doha Style Compulsory license to export two anti-cancer drugs patented by Roche/Pfizer, there have been some articles on this theme in the mainstream media. We bring you two of them in this post. For our earlier posts, see here (in particular see the exchange with Tahir Amin in the "comments" section of the blog post), and here.

Tatum Anderson wrote a piece in IP Watch and Jonathan Allen reports on this in Reuters.

The Reuters piece has an interesting quote from a Roche spokesperson:

"Natco has offered 5 percent royalties on sales it makes to Roche and Pfizer, in keeping with TRIPS guidelines.

Asked to comment on Natco's offer, a Roche spokesman said: "Tarceva is already available in India through Roche and therefore patients in Nepal have access to Tarceva."

I've been trying to make sense of this statement. If Roche has made Tarceva available in India, how is it necessarily available to patients in Nepal?? The last I checked, these were two separate countries.

On a more serious note, this brings us to an important issue. Is Tarceva available to patients in Nepal, and if so, how is it priced? Unless we know this, it is very difficult to comment on whether Nepal has a "public health" problem. After all, section 92A cannot be invoked unless there is a public health problem.

Aren't there any Nepalese reporters covering this issue who can give us more facts? Many missing links here, including: does Natco have drug regulatory approval to sell in Nepal; do Roche/Pfizer have regulatory approval and are they selling in Nepal etc etc.

Secondly, it appears that the Nepal notification is a mere authorisation from Nepal's drug controller to a Nepalese distributor permitting imports of Natco's generic drug--this authorisation does not speak of a public health problem in Nepal.

As far as Nepal is concerned, they can permit anyone to import these drugs, as there are no patents. But Natco cannot export, without complying with the terms of the Doha regime and section 92A--as otherwise, it would amount to patent infringement in India (since it manufactures in India).

Section 92A uses the term "notification" without stressing what the notification should contain. Can Natco argue that a mere import authorisation as above mentioned would therefore suffice? And that there need be no notification spelling out a clear "public health" problem in Nepal. Under a strict reading of section 92A, they might be able to do this--but the Doha regime clearly requires Nepal to notify the public health problem on the WTO website, spelling out the quantities of drugs it needs etc.

Also, importantly, section 92A uses the term "public health problem". It would seem therefore that the notification would have to stipulate that there is a public health problem --or perhaps the section could be interpreted to mean that the existence of a "public health" problem could be established through other means--for eg. demonstrating that Tarceva is not available at all to patients in Nepal.

It is also important to note, that, till date, Nepal still hasn't made any notification on the WTO website--and I am guessing that both parties must be lobbying the Nepalese government pretty hard now. The interesting legal issue here would be: can the Controller of Patents stay this compulsory licensing application till such time as such WTO notification in accordance with the 2003 Implementation Decision is made by Nepal? (section 92A itself does not specifically refer to Doha or any of it's conditions).

Thankfully we'll have some answers in the next couple of days: the hearing for the Tarceva case (Natco vs Roche) is tomorrow and the hearing for the Sutent case (Natco vs Pfizer) is the day after.

I was quoted in the IPWatch and Reuters articles referred above--and for the benefit of readers, I'm listing below some of the responses that I offered to the authors of the pieces above:

Q 1. What are the kind of opportunities presented by the Doha style licenses for India?

Ans: It’s interesting to note that when I interviewed some of the generic companies in the year 2005, none of them were really interested in using section 92 A, as they didn’t think it made economic sense to export to countries with low paying consumers. They didn’t think the margins would have been great. And most of them wished to focus on the regulated markets of the developed countries.

Of course, now it presents a huge business opportunity for them, as they must have recalculated potential business gains from these markets. More NGO’s operate in these markets and engage with drug procurement here, which means the chances of selling in larger quantities and making money is far better. A noteable example is the Clinton Foundation, which guarantees large orders to Indian generic companies that wish to supply to Africa etc—this helps with economies of scale and production costs etc.

Even apart from the economics of it all, this presents an excellent opportunity for them to work with newer drugs and hone up their technical skills. But for this window, they would have had to wait for the 3 year compulsory licensing window in India to elapse. Even assuming they waited 3 years, there is still no guarantee that a compulsory license would have issued, as they would had to satisfy one of the grounds under the Act (excessive pricing, lack of “working” in India etc).

However, Natco has only just applied for a license and one is not certain on the kind of administrative roadblocks that they would face. As you can appreciate, if this turns out to be a legally and administratively costly affair, it may deter more companies from applying. However, if the process is fairly easy and a good revenue model is established via this CL mechanism, then big pharma has much to fear....

Q.2 How are MNC's likely to react?

Ans. Earlier on, big pharma must have sat easy, as they saw that despite 3-4 years going by since the 2003 Doha implementation decision, not a single license had been applied for or operationalised. This could have been due to several reasons, one of which no doubt was the potential administrative bottlenecks in operating this mechanism.

However, if a precedent is established in India by Natco and the adminsitrative process proves easy, then a number of Indian companies will follow suit. Big pharma will really have to rethink its model of pricing worldwide and may have to drop down prices to reasonable level in the LDC’s where they operate. More importantly, they will also be forced to introduce drugs in the LDC markets quickly--for if these drugs are not sold in these markets (which is sometimes the case), then the case for a Doha Style CL is really strong.

Some of them are already taking some laudable steps in this direction, but they have to do much more. If they manage to drop down the prices, then they not only make it more difficult to invoke Doha style licensing (as the drugs are affordable), they also make it economically difficult for the generics to sell in that market. Of course, the threat of parallel imports and the fear of their home consumers wanting lower prices may disincentivise them from doing so on a large scale—and one will have to wait and see what strategies they adopt. Perhaps they might voluntarily license generics to manufacture and sell at low prices in these markets.

This way, they control the markets and also the threat of parallel imports etc more effectively, than if they had a “compulsorily licensed” player operating in that market. As more Indian companies engage with R&D and discovery of new molecules, we are seeing a greater R&D collaboration between Indian generics and MNC’s. Will these relationships begin affecting the incentives to apply for such licenses? Only time will tell.

A Patently Preposterous Patent?

“…be careful what you say in your blogs—blogs can work for you by denying property rights to others, they can work against you by exposing your ideas prematurely or narrowing your time window to apply for a patent, and they can establish a trail of evidence that a litigant can use against you to show a judge that your invention is an obvious extension of prior art.”

So goes the blog entry which has now set the stage for the perfect patent storm. And what diabolical precision! Accenture sure knows a thing or two about recruiting far-sighted people (no wonder Tiger Woods endorses them), for this particular blog entry is that of Dr.Kishore Swaminathan, Accenture’s Chief Scientist, and now it might come back to him. This particular post concludes thus:

“I have an idea that could revolutionize an important area of information technology—but I cannot tell you because I might compromise Accenture's patent rights.”

The idea which he has referred to, has taken concrete shape as US 7321886 entitled “Rapid Knowledge Transfer among Workers”, and is being dissected and vivisected by techies on blogs the world over. After going through the patent, one gets a feeling that the system, as claimed, sounds pretty huge and elaborate, given the global scale of application for which it is envisaged. The object of the patent is to cater to one specific and, obviously what the patentee considers to be the most important, aspect in the whole gamut of processes which combine to make up the process of outsourcing and here I quote from paragraph 6 of the written description- “knowledge transfer between expert employees of the client and the apprentice employees of the outsourcing agency who will eventually take over the outsourced job function”.

Accordingly, the patent talks of a system and method to enable “rapid knowledge transfer, for example between a plurality of experts and a plurality of apprentices located remotely from the experts”- as quoted from the abstract. There must have been an underlying reason which triggered the search for such a solution. From the written description, it is inferred that the offset in the profits of a client company gained through outsourcing, on account of administrative and opportunity costs incurred by the company in training apprentices from the outsourcing agency, led to the creation of such a system.

Moving to what the system is made up of, a memory system, a host of servers, networks such LAN, World Wide Web and the rest form the physical architecture and soft tools. The method which this physical architecture is sought to be integrated with is based on what is called Knowledge Transfer Plan (KTP) which is basically a template with user-specific portals for communication of all kinds between the client and the agency in addition to provisions for storage, transfer and the works. Now, before I move on to comment further, heeding to Dr.Swaminathan's words of wisdom, here’s a disclaimer. Being a Mechanical engineer, one doesn’t claim to be an authority on computers. However, the subject-matter of this patent doesn’t require one to be a distinguished member of the Mensa club with 200+ IQ, notwithstanding the technical mumbo-jumbo of the patent which gives it an aura of esotericism.

Returning to the patent, simply broken down, it has two broad features, so to say- the means of communication with assorted functions and a method or a template which integrates all kinds of necessary information and functions in order to ensure that the offshore apprentice doesn’t need to travel half way around the world at the client company’s tabs to learn the job-specific skills. On the face of it, this certainly seems to have a lot of economic value. But the issue here is not about its money-spinning prospects; rather it is about its ability to withstand a patentability scrutiny.

The first question would be if the idea and the concept are novel. Without commenting on it, I would like to point out a few other systems which work on more or less similar lines. Collabnet is a platform for globally distributed teams to work in a centralized manner. Then we have IBM’s internal virtual world called Metaverse (we shall come back to IBM in a short while). In a slightly different yet interesting context, is Secondlife. Secondlife is in fact used in a scenario where multiple players in online gaming can interact, share and play. That apart, most design engineers would know of Computer Aided Engineering (CAE) softwares which work on break-the-wall approach where every department of a company aids in the development of a product design. So strictly speaking, the idea of a collaborative virtual environment is not novel.

The next question would be if the system is novel in parts and if the parts together combine to give a unique product? The template as given in the drawings of the patent certainly seems exhaustive, but the written description itself mentions that this template may be customised to suit multifarious contexts thereby indicating that it does not qualify to be a domain-specific or context-specific invention. I dont say that merely because it is capable of being adapted to other contexts, it loses its inventiveness, but the prevalence of such templates in other environments would certainly restrict the extension of this particular Knowledge Transfer Plan to other situations, thereby raising questions about its ingenuity. Had this plan been designed to meet one particular environment, then it may have been non-obvious which again would have had to pass muster in the eyes of those ordinarily skilled in the art (s.103 of 35 U.S.C). Such templates are available even in softwares meant for inventory management. As far as the soft tools and physical architecture are concerned, the written description itself mentions that it makes use of available tools of networking, may be a plurality of them depending on the scale of the proposed activity. Such being the case, even this aspect of the “invention” is neither novel nor non-obvious. As is evident from the examples cited above, the synthesis doesn’t seem to qualify to become a patentable synergy. Now, it is up to the interested members to judge if this “invention” qualifies for a patent grant. This should also be seen with the IBM application (US 20070162321) in mind, which was subsequently withdrawn after opposition from various quarters. Interestingly, the abstract of the application for "Outsourcing of Services" read thus:

“A method for identifying human-resource work content to outsource offshore of an organization. The method is provided on a computer readable medium and includes the steps of identifying at least one task being performed by an organization; associating each identified task with a functional group within a plurality of functional groups related to the organization; determining information about individual human resources spent on each task; determining task information about human resources spent on the plurality of tasks, the task information based on the determined information about individual human resources spent on each task; using the determined task information to determine a value of each task; and outsourcing tasks having a value lower than a predefined limit to at least one of offshore and to a low cost supplier.”

Atleast as far as I understand, the subject-matter of the aforementioned application is not vastly different from that of Accenture’s patent. This was withdrawn with Bob Sutor of IBM citing the following reasons on his blog:

“My IBM colleagues in intellectual property asked me to post the following statement in order to get it out to as many people as quickly as possible:

IBM has put into the public domain and withdrawn its application for patent number US2007/0162321 - Outsourcing of Services. This patent application covers analyzing work flows, skills, economic costs, etc. Here’s why we are withdrawing it — IBM adopted a new policy a year ago to sharply reduce business method patent filings and instead stress significant technical content in its patents. Even though the patent application in question was filed eight months before the policy took effect in September, 2006, had the policy been in place at the time, IBM would not have filed the application. We’re glad the community pointed this application out so IBM could take swift action.”

Note that it is not expressly stated that this application is not “significant in technical content”; rather according to IBM’s policy, the stress would be on patents with significant technical content possibly alluding to the quantum and quality of content (or lack of it) in the application. This application was withdrawn on account of an outburst of a post by a techie on Slashdot. Interestingly, the Accenture patent was granted after IBM’s withdrawal. These two applications/patents are not isolated instances of patents on outsourcing. A host of other patents and applications exist such as US 20070043603, 20060072727 among others.

So was the USPTO paying attention to the content of Accenture’s application? And we thought the Indian Patent Office was not doing a good job. The comments on various blogs on the two “inventions” make for very interesting reading though my sense of propriety prevents me from reproducing them here. Further, some of the comments spew such anti-immigrant (read anti-Indian) venom that the issue has taken a different dimension altogether. Hopefully, the on-going competition among the Democrats to outdo each other in villifying outsourcing doesn’t give this issue a “spicy” political twist, which is all it needs to flare up passions.

SpicyIP Tidbits: Geographical Indications- Just a cup of tea!

The Indian tea industry is now making use of GIs to help globally promote sale of the product. While Darjeeling has long been registered as a logo and has secured GIs in several countries (including the USA, UK, and a collective mark in the EU), the Tea Board plans to protect teas from Assam and the Nilgiris this year.

The Chairman of the Tea Board, Mr.Basudeb Banerjee, said at the 2nd Global Dubai Tea Forum 2008 that this was a long term goal to further bolster the marketing and sale of the teas, especially since India is such a big player in the World Tea Market.

The full article can be found here.

A taxing situation for pharma companies

In extension of an earlier post the Hindu Business Line has reported on the matter in greater detail.

Examining why Indian pharma companies are pushing so hard for tax incentives we see that:

greater regulation of drug prices in the domestic market, a depreciating dollar and pressure on pricing in large markets such as the US, has left the Indian pharmaceutical industry at the crossroads.
In the last nine months, only players with wider geographical presence (with a multiple currency exposure) and with a formulations-based business have managed to clock reasonable financial performance. Thus, the pharmaceutical industry has pinned its hopes on a host of R&D and tax incentives, which if approved in the Budget, would help the players to free up cash flows through tax savings to fund research activities that do not generate immediate earnings.

The proposal to extend income-tax benefits to profits of scientific R&D companies (which not only do innovation, but also focus on other forms of research) may help a larger universe of pharma companies to reap tax exemptions. Players are looking for an extension of this provision by another five years till 2012. Typically, stakeholders in R&D focussed companies do not enjoy meaningful earnings or dividends, till a successful deal is stitched together. With companies exploring options in areas such as oncology which require larger investments compared to other therapeutic areas, the exemption on income-tax will act as compensation. With Indian companies increasingly developing early stage molecules that could be used for further leads, the payments are usually in the form of minor upfront fees as well as larger royalties and milestone compensations, in case of successful commercialisation. This is where exemption of future income from intellectual property (new chemical entities) from taxes, will help.

Its a well written article which looks into a lot of different aspects of pharma companies and their current growth environment. Find it here.

India's First "Doha" Case: Natco, Pfizer and Roche will be Heard Soon...

Sarah Hiddleston from the Hindu reports on a hearing to decide whether or not India should issue its first compulsory license for the export of Pfizer's Sunitnib and Roches' Erlotinib to Nepal.

We had blogged on this application earlier here, setting out the text of section 92A and the various legal issues involved with this compulsory licensing application.

"The government is to consider whether or not it should allow its drugs companies to manufacture patented medicines for export to poor countries at a hearing scheduled in the Delhi Patent Office late next week.

Hyderabad-based Natco Pharma has requested compulsory licences overriding patents owned by the Swiss company Roche on erlotinib and the U.S. company Pfizer on sunitinib — both are anti-cancer drugs. If the government agrees, it will be the second time an export licence has been granted for public health reasons since WTO members agreed on the trade provision in August 2003. The first was issued by Canada for the production of an HIV/AIDS drug for export to Rwanda.

“The Nepal government issued us an import licence and based on that we applied,” M. Adinarayana told The Hindu on Saturday. Natco, which intends to produce 30,000 tablets of erlotinib and 15,000 of sunitinib, has offered the patent holders a 5 per cent royalty, in line with the WTO requirement to provide remuneration."

In order to appreciate the various legal niceties involved in this dispute, we reproduce the text of section 92A:

“(1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India."

Since Nepal is an LDC with time till 2106 to implement product patents in pharmaceuticals, Natco need not worry about procuring a compulsory license from the Nepal government. Indeed, in the light of the fact that there is no patent covering either Erlotinib or Sunitinib in Nepal, one may wonder why Natco needs a license at all. Can it not freely export these drugs to Nepal?

Not so, since the Indian patents act provides a patentee with many exclusive rights, including the right to manfuacture, sell, import etc. In order for Natco to export to Nepal, it has to first manufacture the product--an act that violates one of the exclusive rights of a patentee. Hence, Natco has to make their case fall within the exceptional circumstances carved out by section 92A.

Under section 92A, although Natco does not need a compulsory license issued in Nepal, it still requires issue a notification permitting the importation of patented products from India. From the Hindu article above, it appears that the Nepal government has done so. But one is not certain of the terms of this "import" license. Is this clearance sufficient to comply with the requirements of the 2003 Decision (para 2 (a)), which provides that:

"the eligible importing Member has made a notification to the Council for TRIPS specifying "the names and expected quantities of the product(s) needed".

We've checked the TRIPS website again and there is no notification from Nepal to this effect. The only notification till date is that of Rwanda, which states:

"Based on Rwanda's present evaluation of its public health needs, we expect to import during the next two years 260,000 packs of TriAvir, a fixed-dose combination product of Zidovudine, Lamivudine and Nevirapine (hereinafter referred to as the "Product") manufactured in Canada by Apotex, Inc. However, because it is not possible to predict with certainty the extent of the country's public health needs, we reserve the right to modify the foregoing estimate as necessary or appropriate."

Natco should take steps to ensure that the Nepalese government puts up such a notificaiton soon.

The Hindu article states that the patent office will hear the patentee before taking a decision on whether to grant a license, a step which the article notes is "unusual"! It cites Adi Narayana, a representative of Natco in this regard:

"The Patent office has done something unusual, Adi Narayana explains. For compulsory licenses, the government is empowered to take decisions based on the strength of the application alone.

“I intend to ask the patent office why it is allowing representation from the patent holder,” he said.

Contrary to what Mr Narayana suggests, most compulsory licenses are decided after hearing the patentee-so really, there is nothing "unusual" about this. However, from a strict reading of the patents act, the government is not obliged to offer the patentee a hearing. For regular compulsory licenses under the patents act, section 87 mandates such a hearing of both the parties. However, there is no similar section offering such a possibility in the case of a section 92A "Doha style" application. From this, one might argue that the patentee ought not to be heard under section 92A.

However, this omission appears more an oversight than a deliberate intent to exclude the views of a patentee in deciding a section 92A application. Readers will recollect our earlier comment in relation to whether or not the patentee ought to be remunerated under section 92A. We reproduce this portion from our previous post below:

"Interestingly, the above section does not speak of royalties, but leaves it upto the Controller to fix "terms and conditions". Can the Controller issue such a license without any royalties to Roche? Clearly not, since Clause 3 of the 2003 Decision states that "adequate" remuneration (pursuant to Art 31 [h] of TRIPS) has to be paid to the patentee."

It seems reasonable that a patentee should be offered a hearing, before the government determines what royalty is reasonable under the circumstances.

Readers will recollect that SpicyIP decried the grant of a patent without hearing the parties in the Valcyte case. The same sort of considerations ought to prevail here too i.e. in the interests of transparency and having a government authority make the right decision, we have to ensure that both parties are heard--particularly since this is the first case under section 92A.

SpicyIP Tidbit: Is the Sheen Wearing off?

If reports from the industry are any indication, the signs are that the appreciation of the Rupee combined with an acute shortage of trained professionals for basic research are taking its toll on India’s image as a Research and Development outsourcing hub. According to Mr.Pari Natarajan, Chief Executive of Zinnov, an R&D consultancy firm:

“Some companies witnessed a 20 percent rise last year in the cost of running their R&D operations in India. If this trend continues, the cost advantage of doing R&D in India compared with the US will go away”

He cites the example of Cisco to support his observation. Apparently, Cisco has benefited from its R&D facility in India that has generated 110 US patents, with another 400 pending with the USPTO. To overcome the talent crunch, it has opened 170 academies across the country to train 8600 students. The article from the Business Report further states that India churns out more than half a million engineers every year, but they are not adequately equipped for basic research, limiting the available talent pool to no more than 1,00,000 people. Other bigwigs such as Microsoft, IBM, Intel, AMD, Google, Motorola, Yahoo and Siemens too are not completely shielded from this scarcity. This observation read along with Mr. Basheer’s post on Indian software firms does not bode well for Indian industry.

Not only is this shortage pronounced in R&D, there is a huge gulf in the demand for and supply of quality engineers in the core sector for non-R&D jobs as well. Being an engineer, I can personally vouch for this fact that most engineers in top ranking institutions aim for a career in the services sector and in top-of-the-line consultancies like the Mckinsey group, Boston Consultancy group, Jones Lang LaSalle to name a few leaving very few good options for companies in the core sector. In addition to this, the pay packages from even the best names in the core sector on any given day cannot match those from the software and services sector for jobs of a similar grade nor are they considered glamorous. If companies with a global reputation have a human resource deficit, what about lesser-known outfits which form the backbone of the industry?

Down South (its Southern India, not South India), especially in cities like Coimbatore, Tirupur and Erode which boast of a Rs.10,000-Crore spare parts industry, attracting talented professionals has become a huge issue. It is a little known fact that every car which rolls out of the assembly lines of BMW, Volkswagen and other such auto giants in Europe, has spares made in the Coimbatore region. In addition, there are companies like Lakshmi Machine Works (LMW), ELGI Equipments Ltd, Pricol Industries which supply textile and auto components. These companies are left with limited talent pool to choose from during the placement seasons with not many students turning up even for the pre-placement talk. It should be pointed out that these companies have excellent reputations with their customer profiles boasting of the who's-who of the manufacturing sector, domestic and global. In fact, ELGI Equipments is a market leader in compressed-air technologies investing a whopping 4% of its turnover in its Technology Development Division, which has a tie-up with the Center for positive Displacement of Compressors of City University, London. Ironically, the Coimbatore zone is among the best for engineering education not only in Tamil Nadu, but also in the country with some top-notch institutions that are older than the IITs. Particularly, the core engineering departments of some of the colleges in this region are counted among the finest in Asia. Yet, the cream of these students get absorbed in the IT and ITES sector and naturally, the companies have to make do with what they get. Fortunately for this region, their entrepreneurial spirit is comparable to that of the Gujaratis and the Hassidic Jews. To ensure that they do not miss out on proper talent, entrepeneurs in this region have jointly set up training institutes through their forum Coimbatore District Small Scale Industries Association (CODISSIA). Some of them run engineering institutions through trusts and the students finally get absorbed in these companies.

Such endeavours are the need of the hour for only if there is adequate talent to create intellectual property which is worth protecting; it makes sense to wax eloquent on protection of intellectual property. Sporadic efforts in certain pockets to give quick-fix solutions will not go a long way if we are looking at a sustained development for the next 15-20 yrs. Chinese efforts in this direction are worth learning from and much has been said and written on this. What is left is the most important part-comprehensive planning and clinical execution.

Hopefully, we shall have a post in a few days on the number of patents from small scale industries.

The .Asia domain launched under a ‘sunrise policy’

The DotAsia Organization, an umbrella organization of various national top-level domain registries around Asia (including .IN in India), has launched the global “.Asia” Internet domain for the Asia region under a sunrise policy which gives a preference to trademark owners and celebrities. (Press release available here)

Most domain name launches are a nightmare for trademark owners and celebrities since it means protecting their trademark and identity in yet another jurisdiction. More troubling for them however is the fact that most of the domain names registration occur on a first come first serve basis. This usually means that cyber-squatters grab up domain names of famous trademark and later attempt to sell it to the very same trademark owners for an obscene price. This menace has been effectively countered by the various Domain Name Dispute Resolution Bodies set up ICANN and national registries. However this still does come at quite a price with just the administration fees coming up to about $1500 plus lawyer fees. This when buying a domain name costs lest than $10.

The DotAsia organization however announced a ‘sunrise policy’ for the .Asia launch. This policy gives a first preference to trademark owners and businesses. The organization has also launched a Celebrity Pioneers Program whereby it gives preference to celebrities to register their domain names before the process is opened to the general public. This was undoubtedly a smart publicity move since Kapil Dev who has lost all his other domain names was one of the celebrities to grace this event because he definitely did not want to lose out on yet another domain name.

While I’m sure that trademark owners are breathing a huge sigh of relief at this new policy there is always the other side of the argument – the right to free speech. The internet is crucial to our trade and commerce but there is also the point that the internet is also a platform for people to share ideas and thoughts and criticisms. What if I want to start a website which is a parody of a famous trademark or a celebrity? Parodies are a valid exception to trademark and copyright rights. Under the first come first serve policy all parties have an equal right to grab the domain name of their choice but under the ‘sunrise policy’ the general public is automatically relegated to second class citizens.

However at the end of the day most people would consider the 'sunrise policy' a reasonable policy since it will save millions in litigation expenses.

SpicyIP Tidbit: Natco’s ‘compulsory licensing’ request to come up for hearing next week

IP Watch reports that Natco’s request for a compulsory license to export anti-cancer drugs to Nepal, is going to come up for hearing by the end of February. (Full story is available here) As most of our readers must know SpicyIP had covered this case extensively a couple of weeks ago. The request for compulsory licensing was made under S. 92A of the Patent Act, which allows for ‘compulsory licensing for export of patented pharmaceutical products in certain exceptional circumstances’. This case is especially significant because it is the first time that India is testing this provision. The only other time such a provision has been used in the world has been when Canada used a similar provision to license anti-AIDS drugs to Rwanda. So far compulsory licensing provisions, worldwide, have been used mostly only when ‘AIDS’ had been deemed to have caused a public health issue. This maybe the first time that somebody is alleging that ‘cancer’ is causing a public health issue. Given the inherent flexibilities of the 'public health' provision as a result of the Doha Declaration, it is very likely that even ‘cancer’ will be deemed to be a public health issue. It will therefore be interesting to see how the Controller interprets the ‘public health problem’ in Section 92A.
Another issue which Shamnad had pointed out in one of his posts was that it was not yet clear as to whether the Nepal Government had issued a notification as required by Section 92A. Even the present IP Watch report has not clarified this point. This issue may turn out to be a contentious issue given the fact that Nepal is making a slow transition to a democracy and is still in the process of drafting a new constitution and therefore the question crops up as to which authority in Nepal may issue a notification?
We’ll bring you more on this case next week.

SpicyIP Tidbit: Search for Traditional Remedies for Bird Flu

In a major institutional boost towards applying traditional Indian medicine to modern day afflictions, the National Institute of Siddha (NIS), Chennai has announced that it would jointly work with six other institutions namely, University of Madras, Anna University, Dr. M.G.R.Medical University, King Institute, Madras Medical College and Tamil Nadu Veterinary and Animal Sciences University, in the fight against bird flu. In this connection, a day-long session was held at NIS on Microbiology, Virology and Clinical Parameters in Avian Flu (Siddha perspective).

The details are available here.

SpicyIP Tidbit: Bloopers Galore

Mysteriously, another form of Intellectual Property has cropped out of nowhere. Introducing the “Geographical Indicator Patent” also referred to as GIP. Atleast that is what The Telegraph says:

“Pakistan opposes Jammu and Kashmir’s efforts to get a geographical indicator patent (GIP) on its centuries-old Sozni shawls, saying this embroidery craft is in vogue in its part of Kashmir, too. The neighbouring country’s traders want Sozni shawls made in Pakistan-occupied Kashmir included under the patent Kashmiri Sozni.

Jammu and Kashmir’s Craft Development Institute (CDI) had applied for patents on three handicraft products — Pashmina, Sozni and Kani shawls — with the Chennai-based Registry GIP in 2005-06. The Registry, as required, invited objections from within and outside the country.”

Demons of self-doubt were about to conquer me for a brief while for I thought my knowledge of the rudiments of IPR had gone for a six and I frantically rummaged the net for information on GIP. Luckily, it turned out that the demons were a product of a presumed Tamas (meaning darkness, alluding to all-conquering ignorance). It is disappointing to know that a mainstream popular publication from the land of the silver-tongued Vivekananda is prone to such errors of conception. Probably, we need to conduct a few workshops and seminars on IP awareness for the media before we move on to so-called rural and uninformed sections of the country.

SpicyIP Tidbit: “RIN”

Rural India, it appears, is telling its urban counterpart that it is time the latter caught up with it in terms of innovation. After NIF, we have another NGO helping rural innovators get their due. Rural Innovations Network (RIN), founded by a Mechanical engineer (cant help feeling proud of one of my brethren) Paul Basil, has lent itself to the cause of making commercially viable products out of rural innovations. The primary areas of RIN’s focus are innovations related to water, agriculture, dairy and energy. In addition, RIN has a tie-up with IIT Madras and Servals Automation, an SME. Details on several such grassroots innovations are available here.

SpicyIP Tidbits: Patent Cause List

Here’s a case involving the “Loins of Punjab”. New Delhi-based Enkay Rubber Co. which manufactures bladder shells for inflatable balls including soccer balls has alleged infringement of its US Patents 6,544,608 B1 and 6,949,276 B2 by Score American Soccer Co., Uniroyal Goodrich and Michelin N.A. According to the former, the defendants imported certain soccer balls, including the Jupiter soccer ball, from Sports Syndicate and Hans Raj Mahajan & Sons from Punjab, which infringe claims of the patents. The case has been assigned to U.S. District Judge in Texas T. John Ward.

SpicyIP Tidbit: Ranbaxy’s Dutch Challenge “Pfizzes” Out

Taking a cue from the late Saddam Hussain’s (or is it Hossein to faithfully toe CNN's line?) (in)famous phrase, “the mother of all wars”, it appears that the Lipitor patent challenge is being touted as “the mother of all patent challenges”. Pfizer’s Lipitor is a cholesterol-lowering drug and Ranbaxy’s bid to challenge Pfizer’s Dutch patent on basic lipitor (EP 247633) received a setback with the High Court in the Netherlands, affirming the District Court judgment of 2006, by upholding the validity of the patent. Further, the judgment prevents Ranbaxy from launching its generic version before the Lipitor patent expires in November 2011.

The Lipitor patent which was granted on January 30, 1991, expired in 2007. However, Pfizer had obtained Supplementary Protection Certificates (SPCs) which extended the term of the patent to November 5, 2011. This judgment must be seen in the context of the bitter struggle involving the companies over the Lipitor patent in 17 countries. Ranbaxy though unsuccessful in US in 2005, tasted success in Norway in 2007. In 2007, a Spanish Court upheld Pfizer's basic patent covering the calcium salt of atorvastatin, the active ingredient in Lipitor but invalidated a patent on a stabilized formulation that includes atorvastatin. This “mother of all patent challenges” is certainly worth observing for it could have several ramifications for Indian manufacturers.

The complete article is available here.

Patent-ly problematic

India's IP regime is being hauled up for not being industry friendly enough by the biotechnology Industry Association (BIA).

Business Standard reports -

The association raised the following concerns:

1. Indian laws lack clarity with regard to the patentability of biomolecules like nucleic acids.
2. The provisions dealing with disallowing patents for known products which do not result in significant enhancement of efficacy.
3. India's capacity to include data protection clauses for medicines.
4. The "onerous" obligations relating to the disclosure of source and geographical origin of biological materials used for inventions which are the subject matter of patent application which subject "valuable patent rights to uncertainty.
5. Indian patent laws do not favour large scale patent monopoly for incremental innovations on known substances.

The BIA has also pointed out similar deficiencies in the IP regimes of other developing nations like China, Thailan, Brazil, Chile, Egypt etc.

In a representation to the office of the US Trade Representative (USTR) on February 11, the association has demanded that India be kept under the priority watch list of USTR due to inadequate intellectual property (IP) compliance.

BIA represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centres and related organizations in the US and 31 other countries. In addition to healthcare, BIA members cover sectors like agriculture, industrial and environmental biotechnology products and services.

Spicy Tidbits: Compulsory Licensing Dilemma

Bangkok is continuing preparations to import the generic drug to treat breast and lung cancer patients to fulfill its obligations under the universal health care scheme. This is despite the uncertainty over compulsory licensing in the country.

The Government Pharmaceutical Organisation board has chosen to sign a deal with Dabur Pharma to distribute Docetaxel.

The GPO chose the Indian drug maker over two other companies, including patent owner Sanofi Aventis, after it offered to distribute the drug for 1,245 baht per 80mg compared to the original version which costs 25,000 baht.

The government has approved compulsory licensing for Docetaxel, lung cancer drug Erlotinib, breast cancer drug Letrozole and Imatinib, a drug used in the treatment of leukaemia and gastro-intestinal stromal tumours.

When asked about the status of compulsory licensing the authorities replied as follows:

Public Health Minister Chaiya Sasomsab said the ministry would take no further action on the licences announced for these cancer drugs. The final decision would be made by Prime Minister Samak Sundaravej.
On Jan 4, then public health minister Mongkol na Songkhla approved ministerial announcements to import generic versions of four cancer drugs for treating patients under the universal health care scheme. He later struck a deal with Novartis after the patent holder agreed to supply its medicine free to more than 900 patients.
Mr Chaiya wanted to review the CL policy introduced by Dr Mongkol, but he found out on Tuesday that it cannot be revoked.

The full article can be found here.

SpicyIP Tidbit: Patent Progress Report

No matter how much we try to extol the virtues of a qualitative analysis, none can deny the relevance and significance of a quantitative evaluation, for numbers speak for themselves or atleast the common man presumes them to do so. The editor of Intellectual Asset Magazine (IAM), Joff Wild, has come up with a “Patent Focus Report for 2008” for Thomson’s Knowledge Newsletter. According to this report:

“The patent office is struggling to cope as applications rise. Despite the increased workload, the four offices that handle examinations — Kolkata, Delhi, Mumbai and Chennai — have under 200 examiners in total. Recruitment has proved difficult and the attrition rate is high: the Mumbai Mirror reported in August 2007 that one-fifth of staff had left their posts in the previous two years. This is one of the reasons why applicants wait an average of two years before the examination process begins. However, there does seem to have been a surge in the number of patents being granted, if recent reports are correct. During the Indian patent office's current fiscal year, which finishes at the end of March 2008, over 10,000 awards have so far been made. This figure is significantly higher than the 7,500 granted for the whole of 2006/07 and the 4,320 granted during 2004/05. Of course, it also begs the question of just how much scrutiny these patents have received given the low numbers of examiners currently employed.”

The last observation could not have been more apt considering the quality of applications filed and the procedure of examination they are subjected to. For instance, there was one peculiar application which I came across during my search for patents on diamonds. This application was titled “Artificial Sun” and the abstract read thus:

“Artificial sun is the reflector satellite prepared or covered by mirror will be sent to the gravitation of the earth as like as moon. Then the night will be change to the complete day in all over the world or throughout the world and the light is the most source of solar energy of solar electricity.”

Now after reading this application, I was instantly reminded of the movie “Die Another Day’ (2002) where Toby Stephens, who plays the bad guy, builds a satellite similar to the one crudely described above. Since this application was filed in 2006, all my hopes were dashed to the ground for I was naively expecting that for a change here was a case of a Hollywood movie, a slick Bond-flick at that, ripping off from an Indian patent application! Alas, that was not to be.

On a much more serious note, I could not help contemplating if all the efforts at sensitising the public about the importance of IP are of any use at all. I felt so, for if the establishment itself is not able to get its act together, how on earth are we going to convey the message to a population of one billion and still counting? For a moment let us turn a blind eye to the inefficiencies of the establishment which is consistent considering its track record; but what about the mainstream media, print and electronic? Arguably, a near-accurate indicator of the level of consciousness in any aspect of a nation’s public life can be gauged from the manner in which the media reports. The more informed the media is on subtler aspects of so crucial a branch of social engineering as law, the better it is for the nation’s progress and social evolution. This does not seem to be the case in India. The other day a few reputed publications screamed from the rooftops, with the headlines reporting in breathless tones, that Bajaj had won the patent infringement case, when prudence and responsibility required them to refine their language. Were the merits of the case as regards the issue of the validity of the patent ever discussed in detail? No. The 56-page order of Justice Jothimani clearly states that the complexities of the case were not required to be dealt with at this juncture, for a prima facie case had been established on the basis of balance of convenience in favour of Bajaj. Does it not beggar logic to extrapolate this carefully worded piece of judicial pronouncement to illogical extremes thereby demonstrating a classic instance of Reducto Absurdo? One fervently hopes that atleast respected sections of the Fourth Estate retain the dignity of that beautiful profession and hold aloft the flame of truth.

That apart, the patent focus report reels out statistics on the current rate of patent filing in China, Europe, USA and Japan which may be accessed here.

SpicyIP Events: NLSIU to hold a National Symposium on Challenges to India's Patent Regime on the 12th and 13th of April

The National Law School of India University (NLSIU), Bangalore is going to hold a National Symposium on Challenges to India's Patent Regime on the 12^th and 13^th of April, 2008. The symposium is being organized by the Editorial Board of the National Law School of India Review (NLSIR) – NLS's flagship journal formerly known as the Student Bar Review. The website can be accessed here. The concept note for the Symposium is available here. As per the website of the Symposium

The Symposium has been structured to discuss the cutting edge issues relating to the patent regime in India. Over four sessions, it looks to cover the theoretical justifications for patents, India's role as a country which is a signatory to TRIPS, the contentious issue of pharmaceutical patents and finally an analysis of possible judicial attitudes towards patent law and legislation in India. The Symposium hopes to bring together an assembly of judges of the Supreme Court and High Courts, patent attorneys from the USA, senior advocates, technical experts, ideologues as well as activists to facilitate constructive discussion of the issues set out and the best way forward for India's patent law.

For more details you can contact Arghya Sengupta (Pronounced as Orgo Sengupta!), the Chief Editor of NLSIR at arghya.sengupta@gmail.com or call him at 919886023232/919871668286. Incidentally Arghya has been awarded the Rhodes Scholarship for further studies at Oxford University.

Also, you can access the free archives of NLSIR over here. This journal carries some of the finest legal writing ever published in India and I strongly recommend it for anybody interested in Indian law.

Good news for movie watchers

Moser Baer has developed an innovative strategy to fight copyright infringement. Read Shamnad's post on Moser Baer and its pricing plans for more context here.

Moser Baer has brought over the rights to numerous movies ranging from classics like Kora Kagaaz to newer hits like Jab We Met which are being sold at prices ranging from Rs. 30 (VCD) and Rs. 39 (DVD to Rs. 34 and Rs. 49 respectively. Since these days most pirated versions cost more than this they've steadily chipped away at piracy - shopkeepers at Crosswords report they sell approximately 200 CDs and DVDs a day!

In the context of rising ticket prices due to the multiplex phenomenon Moser Baer's pricing strategy has given its sales an additional boost. With better quality, lower prices and more sales almost everyone is happy except a few video store owners who benefitted from a larger profit margin and more flexibility while bargaining with customers.

Another smart move by Moser Baer is its foray into regional films. The article I'm using as a reference only speaks of Kannada movies but if the response Moser Baer has received is any indicator then Moser would profit immensely from tapping into the markets associated with regional cinema.

Find the full article here.

SpicyIP Tidbits: Wedding Bells ring victorious!

Recently Bharatmatrimony.com discovered the website 'Bharathmatrimony.net" which promoted itself as India's No. 1 Matrimony website. They have successfully proceeded against the infringing website for the domain name as well as the trademark.

Enthused by this victory, the portal now plans to proceed against other infringers to protect the interests of the Company. The full report can be found here.

Exporting Bayh Dole to India: Whither Transparency--Part II

As promised, I'm posting some of my preliminary views on the Bayh Dole style bill in India. Would love to hear what readers think about this proposed bill--it may be an old version, but it's a fair guess that there are no radical changes in the version introduced in Parliament.

1. The India bill, much like its US equivalent (Bayh Dole) is premised on the assumption that intellectual property rights are the best way to drive innovation. The more IP, the better for innovation. As our sophisticated readers are no doubt aware, there is plenty of literature that casts strong doubt on this lopsided view. IP and innovation are two different things and an IP regime is but one way of incentivising innovation. It is fatal to assume that increasing IP rights will necessarily generate more innovation.

Rather, too much of IP may skew the balance in favour of the rights holder and end up impeding research and innovation. The challenge is in finding the right balance and in ensuring that we preserve a rich and robust public domain.

Apart from the above, we’re seeing some great alternatives to the IP model emerging. Indeed, even as we speak, international scholars and activists are debating the merits of incentivising innovation through a variety of alternative means including “prizes”, “advance purchase contracts” etc. Closer home, Dr Samir K Brahmachari, Director General of CSIR, India’s premier R&D body, has been advocating an open source model in drug discovery.

This is not to suggest that intellectual property rights (IPR’s) are bad in any way, but only to caution that IPR’s are but one way of incentivising innovation. Given that we are dealing with innovation and creativity, we must be open to trying out some of these alternatives i.e. we need to innovate within our innovation regimes!!


2. The bill is addressed to any university or non-profit research institution that receives money from a government agency. Section 4 of the Bill stipulates that the grantee university or research institution must disclose all inventions (that come out of research using government money) to the government agency within 90 days of actual knowledge of such invention. Section 5 then goes on stipulate that if the grantee institution wishes to patent the said invention, it must make a declaration to the government agency within a period of 180 days of the “disclosure” under section 4.

3. The researcher who came up with the invention has to be paid at least 30% of any royalties stemming from the licensing of the patent. If the grantee university or research institution does not elect to retain title over the invention, the government can step in and patent the said invention. In such a case, it is not clear if the researcher would get any royalties at all!

4. One may argue that the proposed bill does not force a scientist or a grantee institution to patent their research. Rather, it only paves the way for making it easier to patent, when such research comes out of government funding. The Science article speaks about a researcher, Dr Manju Ray, who had a tough time patenting an experimental anticancer drug, as the institution that she worked for dragged its feet over the issue.

No doubt, in cases of this kind, the said bill may help. I say “may”, since Dr Ray may still lose out under the bill, if her home research institution continues to drag its feet. Under such circumstances, the option to patent transfers to the government and not to Dr Ray. The Science article speaks about some scientists and analysts who wonder “whether the government has the resources to carry out its threat to claim patentable discoveries if institutions drag their feet.” So what if the government does not step in and patent—can the researcher do so? The bill does not speak to this at all—and without an explicit legal right to patent under the bill, one is not sure if any researcher will risk doing so.

5. In much the same way as it divests the researcher or inventor of the right to patent his/her invention (even if the university or the government drags its feet), the bill also does not give an inventor the discretion to decide whether or not his/her invention is best left in the public domain. Rather, such a discretionary right is only given to the government funding agency (section 5 (3)).

As our readers can appreciate, in some critical areas of science, it may make sense to encourage more “open science” as opposed to a proprietary model. If we don’t leave enough ideas in the public domain, research and the progress of science and technology could be stunted. Professors Eisenberg and Rai argue in a seminal piece as below:

“Although intellectual property rights may sometimes be necessary to motivate private firms to develop and disseminate university-based discoveries, the trend towards assertions of intellectual property rights by universities might also impede the progress of science.

The challenge lies in distinguishing discoveries that are better developed and disseminated through open access from discoveries that are better developed and disseminated under the protection of intellectual property rights. Under the Bayh-Dole Act, institutions that perform funded research enjoy largely unfettered discretion to determine when intellectual property rights are appropriate”

6. Readers may recall an earlier SpicyIP post, where we had spoken about the present CSIR chief, Dr Brahmachari’s laudable move to put the SARS genome in a publicly available database, rather than to patent it. Unfortunately, under the bill, Dr Brahmachari may find that he has no say in the matter anymore and it is the University, and more specifically the “technology transfer office” (TTO) within the University that will be the sole determinant of whether or not the invention ought to be patented.

TTO’s are known to be very aggressive on patents and not very sensitive to alternative ways of achieving technology transfer and knowledge spillovers, a point we will come to in a while.

7. Section 11 of the Bill mandates the creation of an “IP Management Cell” (the title itself indicates a further skewing towards IPR dependent innovation and knowledge spillovers, as opposed to a broader knowledge spillover encapsulated under the term “technology transfer office” or “knowledge transfer office”). A good question to ask would be: will the TTO or the IP Management Cell of a University be enlightened enough to decide that in some cases, inventions are best left in the public domain? Not very likely, at least to those who have studied the attitudes of US TTO’s in a post Bayh Dole environment.

Some TTO’s are more gung ho and aggressive about patents than the big corporates like Microsoft or Pfizer. And it is precisely this "aggressive" patenting attitude that has spurred the ongoing talks for a potential reform of the Bayh Dole Act in the US. The attitude of TTO's however is not surprising , as their performance is measured solely in terms of patents registered and licensed to industry.

8. In order to prevent the high skewing in favour of “patents” at TTO’s, one must evolve a mechanism, where we can measure the performance of TTO’s by not just the number of patents they take out, but by how effectively they achieve “knowledge spillovers”. And one ought to be able to measure the output of a scientist, not just by patents, but by publications, and steps taken to disseminate their findings and have the knowledge easily translatable to useful products or follow on research. This is indeed what universities are meant to achieve. And a truly evolved bill would have sought to achieve this or at least factored in these concerns.

9. The bill’s focus on increasing patentability at Indian research institutions comes out of an assumption that industry will not invest in university research, unless such research is patented and then exclusively licensed to industry. In other words, it is only the promise of a monopoly that will drive industry to pick up university research and develop them into marketable products. While this is true is some cases, in some others, society may be better off if the invention is licensed on non-exclusive terms. The bill has to encourage such non-exclusive licensing, when the technologies are important and need wider dissemination.

10. The bill provides for compulsory licenses and stipulates that the same grounds available under the patents act applies to inventions under the bill as well. This is not really saying much, as even without this specific position, that would have been the case. Patents on inventions coming out of government funding are treated like any other patent under the Patents Act and are subject to compulsory licenses. Given that these are patents arising out of government funding, the bill should have explored the opportunity of subjecting them to wider compulsory licensing norms than those that currently exist under the patents act.

Under section 84 of the Indian Patents Act, a compulsory license on certain specified grounds (such as excessive pricing, inadequate supply of product etc) can issue only after 3 years after the patent has been granted. The bill ought to have done away with this 3 year waiting period in the case of government funded inventions/patents.

11. The Bill provides that the government agency that funded the invention/patent in question can use the invention at any point in time. This ought to be widened to the whole of the government and not just the specific government agency that funded the relevant invention/patent.

12. Lastly, and perhaps most importantly, we need to really work through the wisdom of policy implants from other jurisdictions. The bill draws heavily from the Bayh Dole Act in the US--a legislation that addressed a specific problem in the ‘80’s and may have done some good. But given today’s context, some are of the view that Bayh Dole may be impeding the progress of science and technology.

Does it make sense for India to blindly import such a bill, given that we have a different set of circumstances (and cultural specifities) than what prevailed in the US in the '80's. Aren't we different, in terms of the nature of university resaearch, relationship with industry etc and shouldnt this be taken into account whilst drafting such a bill.

I’m not sure of the answer yet—but am guessing that the government just hasn’t done enough work to investigate these issues before importing this legislation from the US.

As Professor Sampath and Mowery, two leading academics who’ve written some of the best literature in this area, argue in a paper:

“Based on these considerations, we believe that much of the growth in licensing and university-based “spinoffs” that has occurred since the passage of the Bayh-Dole Act almost certainly would have occurred in the absence of this piece of legislation. After all, as we have pointed here and elsewhere, U.S. universities were active patenters and licensors for decades before 1980, and much of their patenting and licensing activity since 1980 has been highly concentrated in a few fields, at least some of which also have benefited from rapid growth in public research funding and significant advances in basic science.

For these and other reasons, we believe that the Bayh-Dole Act was neither necessary nor sufficient for the post-1980 growth in university patenting and licensing in the United States. Moreover, given the very different institutional landscape in the national higher education systems of much of Western Europe and Japan, it seems likely that the “emulation” of Bayh-Dole that has been discussed or implemented in many of these economies is far from sufficient to trigger significant growth in academic patenting and licensing or university-industry technology transfer.

Indeed, there is some question as to the necessity of a “patent-oriented” policy to encourage stronger research collaboration and technology transfer. And the potential risks associated with such policy changes have received too little attention. “

Indian Diamond Industry: "Brighter" Times Ahead

To recount the history of Indian diamond industry would be clichéd and to reel out the list of sobriquets that it has earned for itself and for the country may seem redundant. Nevertheless, to understand the industry, its past and present, is a condition precedent if one is to comprehend, prognosticate and chart the way to the future. As is the case with most other aspects of this nation’s history, the lines distinguishing fact from fiction are blurred in the case of diamond industry as well. To add to this, the enormous amount of literature available on this topic may resemble a researcher’s paradise or nightmare depending upon his or her ability to process data and to put forth meaningful, relevant and usable information. Hence, lapses in mentioning important facts or inaccuracies in presentation are to be presumed inadvertent and may be attributed to paucity of time (if such a thing as time exists). Since this article is meant to give a low down, a brief one at that, on the present state of affairs, both through the patent and non-patent route, one has invested efforts in identifying key players, Indian and non-Indian. A thorough competitive analysis would have been possible had there been a useful Indian patent database. The USPTO and the Big patents Indian database have been relied upon.

Most historians agree that the recorded history of diamond traces its roots to India 30 centuries back, when diamonds were valued for their ability to refract light. Ancient Indian scriptures too mention the use of diamonds. According to De Beers, until 1725, India was the only source of diamonds in the world. Most of us must have heard of the famed Koh-I-Noor and Hope diamonds. (Interestingly, as a kid I remember having read that Koh-I-Noor is the Sun jewel of the legendary hero of Mahabharata, Karna which passed into several hands over aeons to finally become the Koh-I-Noor. It is believed that this jewel before becoming the Koh-I-Noor was possessed for a brief while by Nadir Shah, Allaudin Khilji and Maharaja Ranjit Singh before moving into British hands.) In the “Second voyage of Sinbad”, India has been referred to as the “Valley of Diamonds”. Cut to 2008, Indian rough diamonds account for a miniscule 0.1% of world production, with the industry focussing its energies on diamond processing instead. However, it should be pointed out that a certain section of the industry is optimistic that India still has a large number of diamond reserves and could once again become a significant producer with a few initiatives in prospecting. This belief is further emboldened by the fact that the country’s mining statutes were amended in 1994 to allow foreign investment. Of course this would lead us to the issue of “Conflict diamonds”, which I shall desist from delving into since it is not strictly within the scope of this article. For those interested in understanding the issue better, details are available here.

Coming back to processing, diamond cutting and polishing comprise processing with India being the world’s largest processing centre, with a million processors handling over 57% of the world’s rough diamonds by value. It is of course common knowledge that Mumbai and Surat are the major processing centres, which we shall see, is reflected in the patents as well. Diamonds constituted 64% of $17.1 billion worth exports by the Indian gems and jewellery industry in 2006-07. Cut and polished diamonds formed 10.5% of the total exports from India. One could go on with the number-crunching, but what is it that these figures communicate to the reader? Is everything hunky dory with this “radiant” industry”? If yes, is the industry doing something to sustain the momentum so that it reaches the very top of the market? Where do patents come into the picture?

From dominating the market for moderately big diamonds, India has moved into the market for big diamonds. The former was earlier Israel’s forte and the latter is Belgium’s playground with India making deep inroads in this segment.There’s one factor which could upset India’s apple cart and this factor we better not ignore-China. Low labour costs and skilled workmanship propel Indian exports; however China holds the key to becoming the market leader- both cheap and quality labour combined with expertise in technology. China uses automatic machines with India relying on archaic semi-automatic machines. Though China isn’t a force to reckon with in the diamond industry, it wont be long before it catches up. In fact, the Chinese have already mastered the art of making small diamonds. Further, Indian industry relies heavily on exports for its revenues, whereas the Chinese domestic market is absurdly enormous thanks to increased spending power of the Chinese. This explains why major players, including India, are setting up shop in China.

In the light of these developments, it is heartening to note that Indian industry is becoming more tech-savvy. The Indian Diamond Institute has been strategically set up at Surat to promote research and development and to assist the industry. It must be understood that in most places diamond cutting and polishing are professions which certain families have practiced for generations together and may fall under “traditional knowledge” as well. Like most forms of traditional knowledge, skilled artisans in this industry are in short supply which further strengthens the case for increased reliance on improved technology. (This does not, however, mean that steps to preserve and promote traditional skills must be neglected). According to an article in the Economic Times, the Indian diamond industry is making rapid strides in the area of technology. It says, the industry now boasts of:

“a software that maps inclusions and flaws in diamonds, equipment that generate cutting solutions with estimated yields, green lasers that doesn’t leave pronounced burn marks on the diamonds, hi-tech diamond calculator for gauging the light, lustre and fire of the stones and fully automatic polishing machines.”

It has been reported that the industry investment is to the tune of Rs.700-1000 crores in just a few years. Some of the big players, who shall feature in the patents as well, are Israel-based Sarin Technologies Limited and OGI Systems Limited, India-based Sahajanand Technologies, Bombay Mill Manufacturing, Lexus group, Dimexon Diamond Limited etc. Consequently, one felt that a patent search was warranted to understand if this enhanced emphasis on technology has translated into increased IP protection. As mentioned earlier, I relied on Big Patents for information and the figures are as follows:

Number of Indian patents Issued: 88

Number of Indian Patentees: 18

Number of non-Indian Patentees: 70

By Indian patentees, one refers to home-grown industries and entities of Indian-origin. Among Indian patentees, Arvindbhai Lavjibhai Patel features prominently with 5 patents to his credit, most of which are on laser diamond sawing machine. One is not sure if this Arvindbhai Lavjibhai Patel is the Arvindbhai Patel of Surat-based Sahajanand Technologies since the patent makes no mention of Sahajanand Technologies. M/s. Shairu Gems of Mumbai are next with 2 patents to their credit. The rest of the patents are distributed among National Mineral Development Corporation, Premkumar Kothari, Venus Jewels and 7 others.(Premkumar kothari, it appears, heads Fine Jewellery, which also has a couple of US patents to its credit.)

Among non-Indian patentees, Gersan Establishment from Liechtenstein leads the pack with 9 patents, followed by Element Six of USA with 8 patents. Homeomi Brains from Japan has 5 patents to its credit with 3 from De Beers, the South African behemoth whose star is on the wane. Carnegie Institution of Washington too has 4 patents followed by 3 of Diamond Innovations, 2 each of Gemological Institute of America, Intel Corporation and General Electric Company. These players are followed by 30 other players with a patent each, most of who are from the US, Belgium, Japan and Israel.

It must be understood that of these patents, a few concern the use of diamond in tool making industries and other such applications. So strictly speaking they may not contribute to our understanding of the technological advancements in the diamond processing industry, but may still be of use to know the demand for diamonds in non-conventional applications. Surprisingly, some of these patents sound like business method patents. I reiterate that this inference may not be accurate since it is the product of a cursory perusal and not a meticulous analysis. In addition to these patents, it was reported that the Gitanjali group of India has applied for 25 patents in diamond cutting.

Next, one decided to search for US patents in diamonds by Indian applicants and the search threw up the following results:

Number of US patents by Indian Applicants: 6

Of these five are held by Fine Jewellery owned by Prem kothari and one by Council for Scientific and Industrial Research (CSIR).

These figures indicate that Indian players are becoming increasingly conscious of the edge which comes with technology. One hopes that this “enlightened” approach pervades and percolates to drive the Indian industry to “dazzling” heights.

SPICY IP Tidbit: WHO Report on TRIPs Flexibilities and Access to Medicines in Thailand

In WHOs recent mission to Thailand saw the release of a 31-page report entitled "Improving access to medicines in Thailand: The use of TRIPs flexibilities.” According to a recent news item, the report "provides technical information and policy options on the general rules and mechanisms available to countries for use of the flexibilities contained in the Trips and other international agreements, in order to promote greater access to pharmaceutical products."

The report specifically highlights the flexibilities in the TRIPs agreement pertaining to compulsory licensing and Government use: "The use of compulsory licences and government-use provisions to improve access to medicines is one of several cost-containment mechanisms that may be used for patented essential medicines not affordable to the people or to public health insurance schemes…"

Readers will recall that earlier this month, Thailand’s Health Minister Chaiya Sasomsap announced that he would review the compulsory licenses announced by the previous military-appointed government. (See report here) According to him, the decision to grant compulsory licenses on four cancer drugs, two HIV-AIDS medicines and a heart treatment “…might have been a politically correct decision, but not legally correct…." Just a week prior to this statement, in a news interview, Thailand's outgoing Health Minister Mongkol na Songkhla "defended his unprecedented challenge of foreign drug patent rights, saying the poor would lose if a new government reversed the policy"

SpicyIP reported on Thai Compulsory Licenses here and here. Watch this space for a more detailed analysis on the WHO report as soon as we can get our hands on it!

A Tale of Two Patents: Did the Indian Patent Office Collude?

Yet another interesting incident that adds to the long list of “malady of errors” by the Indian patent office: a recent case suggests that it may have granted the same patent to two entities!! If true, this will come as no surprise, given that the patent office does not have an electronic database of patent information, either for their internal use or for members of the public.

Recall the SpicyIP petition that pleaded with the Prime Minister to take immediate steps to mandate the creation of such a database. This request gains even more intensity in the light of this rather absurd double patenting episode. Incidentally, when I spoke with a government person about the status of the SpicyIP petition requesting an online database, he mentioned that the government was issuing a response to the petition. And that we’re likely to have a database in 3 months! Although one tends to be skeptical of this time-line, it seems doable, particularly since the government has already been working on a database for several years.

We anxiously await the letter and will bring this to your attention, once we have this. Now, back to the “spicy” double patenting case…

In June 2002, Hindustan Lever applied for a patent for a “gravity fed water purification system”, assuring a high degree of microbiological purity in the drinking water it delivers. Listed below are the details of this application:

1. Application No. 539/MUM/2002.
2. Patent (No: 198316) granted on January 9, 2006.
3. A PCT was also filed on 22 May 2003.

It is interesting to note that although the application was filed in 2002, it was published only on 13th May 2005—after around 3 years!! One wonders why it took this long and whether the fault lay with HLL or the patent office, which deliberately delayed the publication.

The key claim in the HLL patent reads as below:

“A gravity fed water purification system comprising a filtration unit adapted to filter particulate material, and a chemical purifying unit containing a chemical purifying agent, in which the chemical purifying unit is house in a sealed chamber and is in fluid communication with the filtration unit such that water treated by the filtration unit is then gravity fed into the chemical purifying unit and retained therein for a pre-determined period, after which the water exits the system via a scavenger means which is adapted to recover leached chemical purifying agent.”

Eureka Forbes (EF) introduces an allegedly infringing product “Forbes Acquaure” in the market. HLL sues EF before the Delhi High Court. So far, this seems a straightforward case. But lo and behold, the Indian patent office has issued an identical patent to EF as well!! Well, at least, this is what HLL claims in two actions before the courts. One is a suit before the Delhi High Court and the other is a writ petition against the patent office before the Madras High Court.

In it’s suit filed before the Delhi High Court, HLL claims as below (most of these claims are reproduced from the judgment of Sanghi J (see Hindustan Lever Limited
Vs. Lalit Wadhwa and Anr, 2007 (35) PTC 377 (Del)))

i) That the EF patent application was filed later than the HLL application. While the HLL application was filed in July 2002, the EF application was filed almost 2 years later, on 29th March, 2004. Although EF’s application (App no: 281/CHE/2004) was notified in the patent office journal dated 11th February, 2005, HLL came to know of this only in July, 2005, since the journal was published late. HLL immediately (on 18 August 2005) filed a pre-grant opposition under 25 (1) of the Patents Act.

ii) Without hearing HLL or showing in any way that they have taken the opposition into account, the patent office proceeded to grant a patent to the defendant in about September 2005. And it didn’t even advertise this grant in a proper manner in the journal. HLL then pointed out this omission to the patent office i.e. that it had filed a pre-grant opposition but that this was not taken on record. It did so in a letter, dated 18th October 2005, followed by reminders dated the 29th December 2005 and 3rd January 2006. The patent office not only refused to act on the said representations, but also refused to acknowledge the same.

SpicyIP readers will easily notice the similarities to the Valcyte case, reported in the Mint, where a patent was granted after completely ignoring the opposition request to be heard.

iii) HLL then files a post grant opposition in November 2006. EF fails to reply to this opposition within the statutory 2 month period designated by the patents act i.e. by January 2006. Under the patents act (Rule 58[2]), if no reply to an opposition is filed within 2 months, the patent is deemed to be revoked. However, it turns out that the patent office went out of its way to condone this delay by EF!!. In a letter dated 21st April, 2006, the patent office informs HLL that they have condoned the delay by EF and have granted them a further period of two months to file their reply statement and evidence.

It is against this condonation of delay (and the various other acts of alleged impropriety outlined above) that HLL has filed a writ petition before the Madras High Court. As one can appreciate, HLL’s allegations above, if proven true, will put the patent office in a spot, as the facts suggest a high level of collusion between the office and EF. To summarise some of the damning facts:

i) HLL is issued a patent much later than EF, although it files an application almost 2 years earlier. (of course, it is quite possible that the delay owed itself to HLL's fault)
ii) HLL’s pre-grant opposition is completely ignored.
iii) The patent grant to EF is not properly advertised in the journal
iv) The patent office goes out of its way to condone the delay to EF to file a reply to HLL’s post grant opposition.

However, the Delhi court is not likely to go into all the above allegations. At this stage, it has to only decide the limited contention of EF that since it is a patentee as well, HLL does not have a cause of action. In other words, EF claims that the rights granted to a patentee under Section 48 of the Patents Act can be enforced against a third party, but not against another patentee. And the plaint ought therefore to be rejected.

As is obvious to any elementary student of patent law, the mere fact that someone owns a patent does not mean that they are not in violation of another patent!! And this is precisely what the Delhi High Court held as well. This finding of Justice Sanghi was recently confirmed by a Division Bench of the Delhi High Court.

HLL’s specific allegations against the patent office suggesting favouritism towards EF will be adjudicated upon by the writ petition pending before the Madras High court. SpicyIP anxiously awaits this decision to see if the court will take the patent office to task, if indeed it has transgressed the limits of propriety and actively colluded with EF.

On another note, this case is likely to pose some complex jurisprudential problems. If HLL can sue EF on its patent, then the reverse is also possible i.e EF can sue HLL on the strength of its own patent. We understand that it has not done so as yet, owing to a restraining order from the Madras High Court (that is currently deciding the writ petition). We also understand that EF has filed a post grant opposition against HLL’s patent and this is still to be decided.

So how does one resolve the above thorny issue of double patenting? The following possibilities emerge:

1. Both patents are valid, since EF does not claim that which is already claimed by HLL. In other words, either EF’s patent is for a different technology (very unlikely) or is an improvement over HLL’s (somewhat likely).

2. Both parties claim essentially the same invention (this seems the most probable case here). In this case, one of the patents will have to go! Since HLL’s application is earlier in time, it is the EF patent that should go.

Although EF was granted the patent earlier than HLL (while the grant date for HLL is 2006, EF was granted the patent in 2005), under section 45 of the Patents Act, “every patent shall be dated as of the date on which the application for patent was filed”.

Therefore, HLL’s grant date goes back to July 2002, while EF’s goes to March 2004. It is interesting to note in this connection that section 64 of the patents act spells out that a patent may be revoked, if it covers an invention which is the subject matter of an earlier valid patent. In other words, if EF’s patent is found to encompass subject matter from the HLL patent, then it is likely to be revoked.

It is to be noted that post grant oppositions filed by both parties against each other are still pending—and we may get more clues on the “patentability” issues relating to both these inventions once these decisions are out. In the meantime, we await the Madras High Court decision to see if the court will find against the patent office and take it to task for actively colluding with one of the parties.

Certainly a decision that will have important implications for transparency and accountability at the patent office.

UN Regulation: Hindering progress of biotechnology.

In an effort to provide people with clean drinking water, the United Nations Economic Commission on Europe (UNECE) drafted in 1999 The Protocol on Water and Health. However, like other U.N. agencies, the Protocol in question has been criticized severely for having vague goals, and still worse, having no road map to decide the course of action to be taken.

Worse yet, there are other programs by the UN that have aggressively charted out their own road- effectively preventing the use of developing technology use of important tools that could help to meet the goals of the water protocol.

It is in this context, that an article by the World Politics Review highlights the obstacles created by the the Food and Agriculture Organization (FAO), the Convention on Biological Diversity and other UN bodies, in the promotion of beneficial technology such as "genetically modified" or gene splicing varities of crops. These plants have been specifically developed to help the growth of plants in arid regions, using lesser amounts or lower quality water, and reduce post harvest losses for agriculturists.

Even more astonishingly, these plants have , in at least 18 countries, helped produce higher yields, with lower inputs and reduced impact on the environment. Plant biologists have identified genes that regulate water utilization that can be transferred into important crop plants.

However, as Miller reports, the research for this particular variety of crops is being hampered by resistance from activists and discouraged by governmental over-regulation "including by the FAO agency that sets international food standards, and by onerous, unscientific regulation of field trials under the CBD. In addition, a technical working group of the U.N. Environment Program is currently considering whether to recommend a moratorium on all field testing and commercialization of gene-spliced trees. That would be a devastating blow to efforts to preserve biodiversity and to prevent deforestation worldwide."

While it is understandable that there have been several varieties of GM crops that have failed to bring about the required results, this must not be discouraged, at least by the over regulation of the UN that has made the promotion of these crops impossible. As aptly stated, if nothing is done to remedy the situation soon, all that will "result is vastly inflated research and development costs, less innovation, and diminished exploitation of superior techniques and products."

An opinion on the article can be found here.

SpicyIP Tidbit: Extend copyright protection demands the EU.

Linked up to an article of mine not so long ago, the European Union has suggested an extension of the copyright protection and royalties offered to musicians across the continent.

In a stand taken by the authorities rather than the artists, the EU Commissioner (the union's internal market chief) has stated that "If nothing is done, thousands of European performers who recorded in the late 1950s and 1960s will lose all of their airplay royalties over the next ten years"... "these royalties are often their sole pension."

Well, it's great to see even that the authorities can sympathetic music lovers at times! Kudos to the EU for taking such a stand.

The main article as reported by the Associated Press can be found here.

SpicyIP Tidbit: WIPO DG post race on, but no Indian running

As WIPO Director General (DG) incumbent Kamal Idris' controversial second six-year term runs out, the longlist of incoming candidates to head the UN IP agency has been released. Of the 15 governments represented for the post, the candidates include two present WIPO depty DGs: Australia's Francis Gurry; and France's Philippe Petit, Reuters reports.

While Gurry is reportedly a strong contender, he has competition in the face of Mauro Masi, who is the Italian delegate for IP, and represents his government in the Board of Governors at the European Patent Office (EPO), ManagingIP reports.

Non-WIPO contenders include Jorge Amigo, director of the Mexican Institute of Industrial Property; Masood Khan, Pakistan's ambassador to the United Nations in Geneva; and Enrique Manlo, a former chair of WIPO General Assembly. The other nominees are from Bangladesh, Brazil, the Honduras, Japan, Kenya, Macedonia, Poland, Russia, and Slovenia.

It is a very diverse contest indeed, the results of which will emerge in May this year; and insiders portend a tough political battle (see the Reuters report above) after the dispute over Idris' term, which has had implications on the organisation's budget as well.

SpicyIP, of course, wonders whatever happened to an Indian participant in the race. We recall an IPWatch article of December 2007 which suggested that Hardeep Singh Puri, former ambassador to Brazil, and then to the UN and the WTO was an informal contender for the post. Where is Mr Puri, we ask, or indeed, anyone from the Indian delegation?

EXPORTING BAYH DOLE TO INDIA: WHITHER TRANSPARENCY? (PART I)

Many of you may have heard of the government’s move to introduce a Bayh Dole style legislation in India. The latest is an article from “Science”, some paragraphs of which I’m reproducing below:

“The Indian government is preparing to introduce legislation that it hopes will reverse the traditional hands-off attitude at most Indian universities toward commercializing the results of basic research. The proposed bill, a draft of which was obtained by Science, sets out rules that institutions must follow once their scientists make a patentable discovery. In addition to serving as the first such nationwide guidelines, the legislation is meant to send a message to university officials that technology transfer is part of their job.

“The idea is to create an environment of innovation,” says Maharaj Kishan Bhan, secretary of the Department of Biotechnology, which helped to draft the bill. Until now, he says, “university administrators [have been] free to encourage or discourage patenting and commercialization efforts. And there are many who believe that industry and academia should be kept miles apart.”

The legislation directs institutions to report patentable discoveries to the funding agency as soon as they come to light and to file patent applications within a year. Institutions and inventors who fail to meet the deadline would forfeit their intellectual property rights to the agency that funded the research. Institutions must give inventors at least 30% of any revenues from a patent and spend the rest on research.

The government plans to introduce the bill this spring in Parliament, where it is expected to win swift passage”.

SpicyIP tried very hard to get a copy of this bill, but was told by several sources that the bill was “confidential”. Given that we are very interested in promoting transparency in Indian intellectual property policy, this is one word that does not sit well with us.

By “confidential”, does the government mean that they are not interested in a public debate? I visited the Ministry of Science and Technology (the Ministry which is pushing this bill) website to check for any references to this bill. Apart from a parsimonious reference to a proposed bill in one of the parliamentary question/answer sessions, the website makes no other mention of this important piece of legislation. Much to my incredulity however, the Ministry has uploaded a draft bill that seeks to regulate “medical devices”. Importantly, it has specifically called for public comments. See here.

Quite clearly, “medical devices” are of greater public interest than a purported Bayh Dole style legislation—which seeks to address issues of innovation, the nature of university research, university-industry technology transfer etc!!

Yes, the government may say that they intend to make this public after the bill is introduced in Parliament. But don’t we all know that once introduced, it is much more difficult to effectuate amendments, even if faults are spotted?

I repeat the last sentence of the science article referred to above: “The government plans to introduce the bill this spring in Parliament, where it is expected to win swift passage”. I am not sure how swift the passage will be. Perhaps a little flashback is in order here: in late 2004, many of us watched with shock as a presidential ordinance introducing pharmaceutical product patents was pushed through overnight. In other words, when the government wishes, it will put even Japan’s pride, the Shinkansen to shame..

It needs to be noted that this is a bill that will have important ramifications, necessitating inputs from all stakeholders and the public at very earlier stages. The issues involved are far too serious and have implications for the nature of university research, university–industry technology transfer and issues of innovation and access generally. I’m not sure as to the kind and quantum of background study already conducted by the government before they decided to import this model from the US. Were there any empirical studies conducted on the patenting trends at universities, the various bottlenecks to achieving better university-technology transfer, how best to achieve better knowledge spillovers of University research etc?

I’ve now dug up what turns out to be a much older version of this bill and have posted it here . I understand that a newer version of this will be introduced in Parliament soon. I will post some preliminary thoughts on the structure of this bill tomorrow. In the meantime, if any of you get access to the bill, do forward us a copy.

SpicyIP Tidbit: Inventor of Indian-origin among NIHF inductees for 2008

Jon Dudas, the Under-Secretary of Commerce for Intellectual Property and Director of USPTO was present during the announcement of inductees into National Inventors Hall of Fame (NIHF) for the year 2008. This year’s list has something India can be proud of, for one of the inductees is Amar Bose a.k.a Amar Gopal Bose, founder of the Bose Corporation. Bose’s list of achievements is staggering among which his patents in the area of loud speaker design and non-linear, two-state modulated, Class-D, power processing stand out for their contribution to the field of acoustics. His co-inductees this year include Ruth Benerito for wrinkle-free cotton, Nick Holonyak, Jr. for the light emitting diode, Erna Hoover for computerized telephone switching, Amos Joel, Jr. for the switching concept for cellular phones, William Murphy, Jr. for a variety of medical devices including the blood bag and disposable medical trays and Kenneth Richardson for the anti-fungal drug, Fluconazole. Nine posthumous inventors too form part of the list. The NIHF, which was co-founded in 1973 by the USPTO, aims to inculcate respect for intellectual property among students and inventors by recognising such contributions to the field of science and technology.

SpicyIP Tidbit: IP Delegation from the Land of Rising Sun

For long India has taken comfort from the fact that its record on counterfeiting of goods and protection of Intellectual Property is better than that of China. It appears that the Indian establishment is in for a surprise. As reported by The Yomiuri Shimbun, a 25-member Japanese delegation with a good sprinkling of government mandarins, including officials from the Japanese Patent Office and private manufacturers from the automobiles, electronics and pharmaceutical industries is in India to present its case on counterfeiting of Japanese goods and to seek stronger and effective methods of enforcement of Intellectual Property Rights. According to Shimbun:

“The delegation will ask the Indian government to strengthen controls to stop the import and export of counterfeit goods and pirated items at the border, and to consider legislation on protecting intellectual property rights.”

The delegation plans to visit the patent offices, custom offices and related agencies to emphasise the importance of protecting intellectual property in a situation of a burgeoning economy. Here it must also be pointed out that Indian government itself loses Rs.900 Crores to the counterfeit market in a global market valued at $500 billion.

Jointly Posted by Yashasvini Kumar and J.Sai Deepak

Spicy Tidbits: Pharma gets bigger in India

Novo Nordisk and Merck and Co are giving out positive indications with regard to expansion plans in India.

Novo Nordisk is motivated by the fact that its status as a leader in the diabetes field will be cemented if it can effectively tap into the Indian market as around 40 million people are suffering from diabetes in India. They have also expressed interest in new drug discovery and manufacturing partnerships. One manifestation of this interest can be witnessed in their association with Ahmedabad based manufacturer Torrent Pharma. Novo Nordisk also has plans to majorly expand its clinical trial operations over the next few years along with firther outsourcing and offshoring of its data management and financial service requirements.

Novo Nordisk is also planning to shift all its data management from the Asia Pacific (excluding Japan), Africa and Latin America shift to its office in Bangalore.

Merck and Co is looking to engage in more research collaborations with Indian and other life sciences companies and academic institutes across Asia over the coming 12-18 months in order to reduce both costs and time involved with drug discovery, especially at the Phase I and clinical trial stages, according to Indian media reports.

The firm is said to be particularly interested in soliciting research collaborations in India in the therapeutic diseases area including oncology, metabolic disorders, diabetes, and neurological disorders.It is apparent that Merck has already begun to make inroads on its India plans.

So far it is involved in research alliances with Nicholas Piramal, Advinus, as well as the National Institute of Pharmaceutical Education & Research (Niper) and the National Centre for Biological Sciences (NCBS) in a bid to boost the number of chemistry graduates.

The article in its entirety may be found here.

SpicyIP Event: International Conference on IP and Technology Transfer

The Society for Technology Management (STEM), a technology transfer forum, will be hosting its flagship international programme, Graduate Course in IPR and Technology Transfer at Hotel Sullivan Court, Ooty from 13-16 April, 2008. The agenda of the programme is to examine, using case studies, the role of IP as a strategic technology transfer tool. Early bird registrations are available till February 29, 2008. Details are available at http://www.stemglobal.org.

Spicy Tidbits: All India Institute of Ayurveda to be established

The Central Government has approved plans to establish an All India Institute of Ayurveday in New Delhi with a budget outlay of Rs 150 crores . The Department of Ayush is scouting for support staff.

The Institute will facilitate scientific validation, quality control, standardization and safety evaluation of Ayurveda products. It also aims to have standardised Ayurveda-based tertiary health delivery, promotion of interdisciplinary research and education of Ayurveda at postgraduate and postdoctoral levels. The Institute will be on the lines of the All India Institute of Medical Sciences (AIIMS) to carry out research in the field of the traditional system of medicine, according to Anbumani Ramadoss, Union Minster for Health and Family Welfare.

The plans contemplate the formulation of an autonomous registered body under the Ministry of Health and Family Welfare, the 200 bed research and referral hospital will be commissioned by 2011.

The Institute will collaborate with institutions engaged in education and research in diverse systems of traditional medicines in countries including Japan and South Korea. It will also interact with institutes in developed countries. The main reason for setting up the Institute is to capitalize on the Ayurveda market which is expected to emerge as a $5 trillion industry by 2050, stated the health minister. According to the industry sources, the Institute will provide the much-needed relief for trained manpower and the research in Ayurveda to help bolster the growth of the sector.

Full article here.

Spicy Tidbits: Animal testing - the quandary

The Central Government has put up a proposal for an Institute for Alternatives to Animal Experimentation in the 11th Plan. The Indian Council of Medical Research is working alternative ways of testing and substitute technologies despite the fact that animal testing is a requirement for various stages of drug trials and scientists are pushing more relaxed norm.

Besides, the DBT has also launched steps to develop in vitro screening system for screening plant extracts having anti-cancer, anti-diabetic, anti-amoebiasis, anti- leishmaniasis, and osteogenic activities before testing on animal models, it was revealed.

``CSIR laboratories have already established high through-put screening, QSAR and molecular modelling facilities and all initial screening are under taken on in vitro models. Only those entities which are found active on in vitro studies are taken up for in vivo studies. In silico simulation of interaction of bio-molecules (DNA/ proteins) with drugs/xenobiotics for elucidation of possible mechanism of toxicity is under development. In fact development of comprehensive in-silico tool for effective clinical trial has also been planned to be taken up during 11th Plan period,'' ICMR sources said.

In the meantime pharma companies are finding it hard to procure animals for testing. Since there's a bit of of a catch 22 situation here - that is pharma companies need their drugs tested on animals to meet international standards yet stern laws and increased activism makes such animals hard to procure. Perhaps increased efforts by international regulatory authorities to find substitute technologies for animal testing.

Full article here.

SpicyIP Tidbit: Indian Gaming Industry and IP creation

The gaming industry is a $10 billion industry in the US and India seems to be the next favourite destination for major players, domestic and international. With the Indian mobile gaming industry, according to NASSCOM, projected to rake in $300 million by 2009, several major players have wisely decided to use IP creation as an effective tool of harnessing the opportunities. DQ entertainment, the Hyderabad-based animation and gaming company has announced a Memorandum of Understanding (MOU) with Japan’s THINK Corporation, which is a 20-yr old veteran in the field of intellectual property creation services. This is good news which reflects the increased IP awareness in companies dealing with high-end technologies.

Advantage India on NAMA

India lodged a protest last week that the NAMA agenda was skewed in favor of developed nations. It had warned that any attempt by the EU and parties to further talks that excluded Indian interest could end in an impasse and stall further negotiations.

The VOI (voice of India) has yielded the intended result.!

Refer to Spicyip post for more on this.

The Revised draft on the Modalities on Agriculture and NAMA (non- agriculture market access) was circulated this week, one that New Delhi has welcomed cautiously.

Noteworthy is the fact that some key point of convergence has been reached on issues pertaining to agriculture in areas that were left unreconciled in the earlier talks..

In a statement issued here, the Union Commerce and Industry Minister, Mr Kamal Nath, maintains that a final view on the two texts by the two Negotiating Chairs of the WTO would be possible only after holding consultations with other Ministries, domestic stakeholders, and India’s partner countries in Geneva.

While stating that the Agriculture text distills the progress made in negotiations between September 2007 and January 2008 with convergence in some areas, Mr Nath said the Chair has also put out brand new text in some other unresolved areas and these would require detailed deliberations e.g. Special Products (SPs), Special Safeguard Mechanism (SSM), Special Safeguards, Tropical Products and Tariff Simplification. (Hindu Business Line)

However issues of divergence still exist

It’s the crying baby that gets the milk and India is not one to give up its demands in areas such as OTDS (overall trade distorting domestic support)market access in sensitive products and tariff capping)as a sell out in these areas would adversely impact Indian farmers.

Another progressive proposal from the G-20 camp is the reduction to a minimum of 54% on agricultural tariffs for developed and 36% for the developing countries. The WTO accords flexibilities for a ‘differential’ (not ‘discriminatory’) treatment based on countrywise economic gradations. India has espoused the cause of a two thirds proportionality between developed and developing countries.

By and large the talks seem to be proceeding on constructive lines and signals a healthy trend.Going by this one can reasonably expect within metes and bounds (and hope) the talks to assume a healthy bounce.

Monica Seles has announced her official announcement from the tennis circuit. We will miss both her game and the grunts on court.

But yes, on a note of cautious optimism it appears to veer towards an ‘Advantage India’ on NAMA and the trade lobby circuit.

SpicyIP Tidbit: “Civil” Scientist

Whoever thought babus could move out of their plush offices to contribute to the development of science and technology, breaking stereotypes in the process? Here’s a civil servant with a difference. Principal Secretary of Civil Aviation Department of Jharkhand, A.K.Pandey has patented a rotary bi-piston internal combustion engine which can be used in automobile, aircraft and railway engines. Instead of a reciprocating movement of the piston in conventional engines, the bi-piston rotates. It comes as no surprise that Pandey holds a doctorate in Nuclear physics. What is even more noteworthy is that he did not take time off his regular duties to complete his pet project. One fervently hopes that such examples lend a more positive sheen to what has come to be loathed as “babudom”.

SpicyIP Tidbit: Reality Check

Is the general level of industrial progress an accurate index of a State’s IP awareness? The answer in the affirmative is not forthcoming on account of facts to the contrary. Gujarat, which has consistently performed well on the economic front, seems to lag behind when it comes to IP protection. An article from sify.com indicates that the rate of patent filing in Gujarat has not increased despite the State government slashing patent filing charges by 50%. In fact, patent applications from individual innovators may be higher in proportion when compared to medium and big industrial houses. The awareness in rural pockets may be attributed to the yeoman efforts of Prof.Anil K.Gupta of IIM Ahmedabad who heads the National Innovation Foundation. I was a witness to this fact during my last internship under him where Shodhyatras were undertaken to identify inventors in remote corners of the country. Let’s hope that the big players too catch up in time to ensure that Gujarat retains its edge.

Spicy Tidbits: Medical Devices Regulation Bill formulated

A draft Medical Devices Regulation Bill has been formulated for the classification of such medical devices which may not be covered by the Drugs and Cosmetics Act. The Bill provides for the creation of a Medical Device Regulatory Authority which has been empowered with extensive powers relating to fining and imprisoning defaulters.

With a diverse range and multitude of medical devices are in use, which aremanufactured using a wide variety of technologies with the result that forensuring the safety of the public in the use of medical devices, an entirely
different system and method of regulation from the current national andinternational practices that are being applied for the regulation of drugsand cosmetics is required," it says on the need for such an act.

Besides looking to harmonise the standards in accordance with the globalnorms to push the export potentials, the bill also seeks to lay downconcrete norms on import of devices and their conformity with the Indianstandards.Standards notified by the Bureau of Indian Standards or other internationalstandards making bodies like International Organization for Standardization(ISO), the International Electrotechnical Commission (IEC), and the International Telecommunication Union (ITU), standards in the IndianPharmacopoeia and other international Pharmacopoeia monographs may beincorporated for harmonization.

The full text of the article can be found here.

Cross Retaliation at the WTO: Why I think WIPO is Wrong

Readers will recollect an earlier post, on a unique WTO remedy involving the suspension of IP rights proposed by Antigua. Read the post here and see my article here, suggesting ways to implement this IP suspension (cross retaliation) model.

A WIPO Official recently suggested that such IP suspension will not work, since Antigua will end up contravening its independent obligations under the Berne and Paris Conventions. An ICTSD newsletter reports:

"A senior official of the World Intellectual Property Organization last week created a stir by suggesting that suspending certain intellectual property protections could leave the Antiguan government in breach of international treaty obligations other than the WTO.

In an interview with the Antigua Sun, Jorgen Blomqvist, the director of WIPO's copyright law division, pointed specifically to the Berne Convention for the Protection of Literary and Artistic Works, an international copyright agreement ratified by both the US and Antigua. The Berne Convention is one of several intellectual property treaties administered by WIPO, which is based in Geneva.

"The [WTO] TRIPS Agreement says that contracting parties shall comply with the Berne Convention, with one exception, but the bulk of the economic protection under the Berne Convention is referred to in the TRIPS Agreement," Blomqvist said, reports the Antigua Sun.

"Since both parties are parties to the Berne Convention, if they, under some other convention, start to not grant protections to each other, then they will infringe the Berne Convention," Blomqvist added. "The fact that under one treaty you can make such sanctions does not relieve a country from responsibilities under other treaties."

Frederick Abbott, a professor of international law at Florida State University, argued that "there is reason to doubt the validity of Mr. Blomqvist's opinion" on the relationship between WTO rules and the Berne convention."

I tend to agree with Professor Abbott and my paper has a good 3-4 pages on why I think the WIPO official is wrong. I reproduce some extracts below, but for a full length version, please see here.


"Upholding the Berne or Paris Conventions, despite a WTO authorization to cross retaliate will render redundant a key aspect of the WTO retaliatory framework. In other words, there is a direct conflict between WTO provisions on cross retaliation and the Berne/Paris provisions, particularly the one on national treatment.

Article 59 of the Vienna Convention provides that in such circumstances, the latter treaty obligation undertaken by member states i.e. the WTO ought to prevail. Article 59 (1) reads:

“A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject matter and:

(a) it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or

(b) the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time”.

As mentioned earlier, the operative provisions of both Berne and Paris have been incorporated verbatim into TRIPS. The key reason for such inclusion was to avail of the strong enforcement framework under the WTO. This is more than borne out by the fact that despite the existence of dispute resolution provisions under both Berne and the Paris Conventions discussed above, no country has so far invoked them, owing to a perception that they were ineffective. As a GAO
report points out:

“[K]nowledgeable government officials agree that [existing multilateral intellectual property agreements] do not contain effective provisions for challenging countries that do not meet their obligations.”

From this, one can conclude that members intended that the “incorporated” provisions (provisions of Berne that were incorporated into TRIPS) were intended to be governed only by the WTO enforcement framework. There is no independent cause of action for their violation or an obligation to submit to the ICJ under Article 28 of Paris or 33 of Berne.

Article 2.2 of TRIPS (which states that nothing in TRIPS shall derogate from obligations of members states under either Paris or Berne101) may cast some doubt on the above intepretation. However, this section can be harmoniously construed to mean that the Paris and Berne obligations that did not make it to TRIPS still survive and members of either of these treaties are still bound to each other, as regards their implementation and enforcement. The moral rights obligation under Article 6bis of the Berne Convention is an excellent example in this regard.

Assuming the above argument does not work, Antigua could easily argue that WTO/TRIPS ought to trump Berne/Paris in view of Article 59 (2) of Vienna i.e. the provisions of TRIPS/WTO are incompatible with Berne/Paris and therefore cannot be applied at the same time. It is the US that has blatantly disregarded a WTO commitment and has, despite panel and appellate body rulings to this effect, failed to comply. A WTO arbitrator has found that the only meaningful way for Antigua to secure compliance is by retaliating in respect of TRIPS i.e. by suspending IP obligations. No other retaliation is likely to have ay effect on the US. However, if such retaliation were to be construed as amounting to a Berne or Paris violation, it virtually renders the enforcement provisions under the WTO meaningless. As discussed earlier, there is no effective way for Antigua to narrowly retaliate by suspending IP obligations that fall outside the purview of of the Paris and Berne Conventions.

Even assuming that Article 59 does not apply and the Berne obligations hold good, Antigua could ignore the threat of any potential sanction for breaching either Berne or Paris. It bears reiteration that it is the US that has contravened a key WTO commitment and thereby seriously prejudiced a relatively much poorer trading partner, Antigua. Antigua’s only realistic way of securing compliance is by suspending IP rights. If this remedy were to be watered down owing to a legal technicality flowing from a reading of TRIPS and the Berne/Paris Conventions, this would be grossly unfair.

With the moral high ground in favour of Antigua, it is difficult to see how a technical breach of either the Berne and Paris Conventions will attract the ire of the Security Council. Intellectual property violations, particularly when otherwise authorized by the WTO, do not seem to be the kind of things that the Security council is likely to waste it’s time on.

Given the track record of the US in complying with ICJ rulings, it will be paradoxical for the US to insist upon an ICJ compliance, that directly conflicts with a WTO DSB authorization. Particularly when it is in violation of a WTO ruling and has come to the Security Council with unclean hands. If not for anything else, China, which has been at the receiving end of WTO actions by the US for allegedly failing to comply with TRIPS is likely to oppose any such move."

SpicyIP Tidbit: And now tobacco is medicine.

The latest news is the Central Tobacco Research Institute has patented 'Solanesol'- a medical substance from tobacco. This was after a collabarative effort with the Central Drug Research Institute. The substance is used as a cure for cardiac insufficiency, muscular dystrophy, anaemia, cancer, diabetes, high blood pressure, asthma and liver injury, and hoped to be used as an important component of anti-diabetic and an anti-cancer drug.

The full article can be found here.

SpicyIP Tidbit: And the Flame continues to rage…

The details of the Madras High Court order restraining TVS are available here. The HC has said that Bajaj has established a prima facie case in its favour owing to the fact that its patent was unchallenged for a considerable period. I believe this was an apprehension rightly expressed by Manisha Singh Nair in her article. TVS Motors seems to have contended that use of twin spark plugs in a cylinder of small bore (diameter) size does not amount to an inventive step to which the Court replied by saying that complex issues which go to the merits of the case need not be considered at this stage and that prima facie consideration was sufficient. It may be recalled that in its patent, Bajaj has claimed inventiveness in the use of twin spark plugs in engines of 100-220cc, which according to TVS is obvious since dual ignition technology, according to it, has long been part of prior art.

Spicy Tidbit: Pashmina v. Basmati

Here's an encouraging article I came across recently. BBC News reports that India and Pakistan are working jointly to register a GI for Basmati rice. The implications of such cooperation are extremely profitable as Basmati accounts for more than half the rice consumed in Europe and the Middle East. As the Indian share in the Basmati market has increased in the past few years Pakistan has suffered and so this GI will be a real aid to their market share.

Amit Mitra, secretary general of Federation of the Indian Chambers of Commerce and Industry, says that India already has a free trade agreement with Sri Lanka and an excellent business relationship with Bangladesh and almost open borders with Nepal.

"What we are left to do is to achieve India-Pakistan and it'll be like a European Union (EU) in very short time," he says. "And it will be an EU that is growing at 9% to 10%, if not more."

Although the situation may not be as optimistic as the quote perhaps trade will set aside years of political religious strife in the region. Now if only they could come to such a convenient consensus with regard to Pashmina.

"Patent" Journalist in India Wins Award

SpicyIP is extremely happy to learn that CH Unnikrishnan of the Mint, by far the most sophisticated "patent" reporter in India, recently won the "best reporter of the month" award. Although an internal award conferred by Mint, what is striking is that the award was specifically conferred for his articles on "patents". Notably, the ones where he shook up the Indian patent office with his coverage on Roche's Valcyte patent, where the patent office issued the patent without hearing the other side. We'd blogged on this here.

Such an award signals that "patent" issues have garnered mainstream media attention in India and is taken much more "seriously" by the public. With more media coverage and with folks like Unni upping the ante for accurate and nuanced IP reporting in India, we are in for a boom time. Needless to state, it makes for more transparency in intellectual property policy and government functionaries that "flew under the radar" for so long will come under the scanner. The beginnings of a wonderful phase of public accountability in IP.

Congratulations Unni. Keep up the excellent work!!

SpicyIP Tidbit: Bruce Almighty.

If there’s a word that could conjure bigger and larger images of quantity other than “Whopping”, it could be “Colossal” or “Humongous”. Either ways, Dr.Bruce Saffran will smile his way to the bank thanks to $501 million he was awarded by jurors in the case against Boston Scientific Corp. in the patent infringement suit involving drug-coated heart stents. Saffran argued that the stents launched by Boston Scientific violated his 1997 patent on technology to deliver medication within the body to heal injuries. Interestingly, he has filed a similar suit against Johnson and Johnson over its Cypher Stent, which is still pending. If the damages awarded in the Boston case are anything to go by, Mr.Bruce might just end up becoming a billionaire by causing major heartburn to a couple of companies!

SpicyIP Tidbit: Applying the brakes to TVS's manufacture.

News about the spark plug crash is coming in fast and how! Reported just yesterday, the auto patent scene indeed seems to be heating up.

In what is seen as a major setback to TVS, an interim order by the Madras High Court has restrained TVS from manufacturing and selling its new TVS Flame 125 bikes. An appeal by TVS's lawyers seems almost inevitable now. For all those who don't remember the exact nature of the dispute a look at past articles on the issue is definitely worth a read.

This is one dispute that doesn't seem like it's going away too soon.

For the full story read the article in THE HINDU dated February, 17th (on page 15 in the print edition).

Digging deep for new developments: To harness the wealth of the ocean!

The Government of India on a new initiative has decided to bolster India's position as one of the leaders in deep sea bed mining and provide a competitive edge for pharmaceutical companies in the development of new drugs.

The Department of Earth Sciences has launched a new programme to harness new beneficial molecules from the sea for "therapeutic purposes". Launched by the Government as a long term assignment, the programme is spearheaded by the Central Drug Research Institute, with the active participation of seven institutes from all over the country including the National Institute of Oceanography, Goa, National Institute of Ocean Technology, Chennai, Indian Institute of Chemical Technology, Hyderabad and Calcutta University, Kolkata.

"The Centre launched the long-term new discovery researches after the private sector players found it difficult to compete in the world market despite having spent upto 10 per cent of their turnover for research." The new molecules are expected as potential anti-diabetic, as well as those having properties of anti-hyperglycaemic and anti-hyper-lipidemic and are well on their way to being developed by these institutes.

With the expansion and dependent on the sucesses of the programme, a proposal has been made to induct new institutes for rearsch, participation and i. such as the Institute of Fisheries Education, Mumbai, Centre of Advanced Studies in Marine Biology; and Annamalai University, Parangipetta, Department of Fisheries, Government of West Bengal, Kolkata. Two other reputed institutes based in Mumbai and Chennai have been rumoured to help in the development of the anti-cancer drug and anti-HIV drugs.


Main Source: Pharmabiz, February 13th, 2008.

And the fight gets dirtier.

In a follow up to a recent post on allegations of collusion between US drug companies and Indian pharma companies with regard to delaying the entry of generic drugs in the US market the US anti-competitive practices watch dog Federal Trade Commission has identified Ranbaxy amongst 4 other firms as being part of the ploy. It is alleged that these companies recieved in excess of $200 million to delay the entry of generic drugs into the US market till 2012 from the US firm Cephalon. The firms are Ranbaxy Teva, Mylan and Barr. The full article can be found here.

The Federal Trade Commission has sued the firm "unlawfully blocking sale of cheap generic versions of branded sleep-disorder drug Provigil." This will prove to be a major commercial threat for the firm as Provigil comprises of more than 40% of Cephalon's total sales.

“Today’s suit against Cephalon seeks to undo a course of anti-competitive conduct which is harming American consumers by depriving them of access to cheaper generic alternatives to an important branded drug,” said FTC Bureau of Competition Director Jeffrey Schmidt.

“Cephalon prevented competition to Provigil by agreeing to share its future monopoly profits with generic drug makers poised to enter the market in exchange for delayed generic entry. Such conduct is at the core of what the antitrust laws proscribe.”

The FTC is pushing for a permanent injunction allowing the entry of generic versions of Provigil as well as a declaration that Cephalon's course of conduct (with regard to this agreement) violates Section 5(a) of the FTC Act and barring the company from engaging in such conduct in the future.

What the article ignores is the repercussions of entering into such an agreement for the generic drug manufacturers. Logically there should be a corollary to Section 5 (a) of the FTC Act which imposes some kind of liability on companies like Ranbaxy. Also maybe should India review generic drug manufacturer's processes to see if any such agreements have been made in India. Considering the repercussions of this kind of agreement would be tragic in India we really should get a regulatory body to examine Ranbaxy (and similar companies) in India.

In conclusion I realize that this post reminds of me of something I've written about earlier. Which is that although generic drug manufacturers often indignantly claim to be on the side of the consumer sometimes you really have to wonder.

A spicy GI

SpicyIP has always had a natural tendency to report on the ‘spicier’ issues of IP law. So just imagine our excitement when we found out about Geographical Indication protection for spices. We however promise to refrain from over-using the ‘spicy’ puns that come to our minds.

The latest is Assam’s ‘Karbi Anglong ginger’ which is well on track to receive GI protection. The district administration recently filed an application claiming GI protection for GIs. The Karbi Anglong ginger is supposed to be one of the finest of its kind with markets as far away as Germany. It is grown in the Karbi Anglong district and derives its special characteristics because of the unique climate and soil of the area. Hopefully GI protection will protect its brand value. More importantly for export markets is the fact that since the district has been backward it hasn’t really used too many fertilizers meaning that the farmers use more traditional methods. The implication of this is the fact that all the farming is necessarily organic farming. As all of you must know organic food is the latest craze especially in the West. For more details on this variety of GIs please click here for the website of the district administration of Karbi Anglong.

Please click here for our previous posts on GIs.

The Hindu in a very well researched article also reports that:

Applications for Alleppey and Coorg Green Cardamom, Sannam chillies and Alleppey Turmeric are in the final stages of GI Registration. Of course, this is only the first step for the Spices Board which will have now have to get market advantage for farmers from these GIs and also register for GIs in Europe as well. There are quite a few other candidates for GIs, such as the Bhut Jolokia chilli cultivated in the Nagaland, the hottest chilli in the world.

Also we now have domestic GIs (geographical indications) granted for Malabar pepper and Tellicherry pepper.

As a part of our new value added services we also point you to a link for 'spicy' ginger recipes.

SpicyIP Tidbit: Revving up Auto Patent Litigation

Finally, it seems like the Indian auto sector is catching up, albeit at its own pace, with its global counterparts not just in terms of technology, but also in litigations over technology. The Bajaj-TVS imbroglio couldn’t have started at a more “opportune” moment; an article from The Michigan Technology News has observed that litigations over auto patents are on the rise globally. Here’s the full article along with a podcast of an opinion maker.

As an autobuff, I can’t decide for myself if this is good news, but the lawyer-in-making certainly smells blood and is raring to go at, what is the word, FULL THROTTLE!

Spicy IP Tidbit: Indian Pharma companies seek 200% rebate

The Hindu reports that Indian pharma companies are seeking a 2oo% tax rebate on R&D. Read in conjunction with my recent post on Indian pharma companies entering into collaboration with foreign firms for research we see our pharma companies are intent to promote research in a big way.

In its representation to Finance Ministry, industry chamber Indian Pharmaceutical Alliance (IPA) asserted that incentives in research and development (R&D) are required to boost the credentials of the sector from being a mere supplier of generic medicines to a research driven industry.

I don't know if a 200% rebate will really make a very big difference though considering that there is already a 150% rebate available. Also rather illogically these rebates are only available to pharma companies and not to stand alone R&D firms.

The current provisions for deduction are restrictive in nature and cover only expenditure incidental to R&D carried on at the in-house facility. It is therefore suggested that its scope be widened, so as to also encompass within its fold all expenditure incidental to basic research carried on at any outside R&D facility, whether in India or overseas." Ranbaxy said in its representation.

Spicy IP Tidbit: Patent Reform in the USA, happy pharma companies in India

An interesting piece by Benedetto Della Vedova on the Patent Reform Act about to be passed in America. Read the full piece here.

The relevance of this to us in India is that apart from the inclusion of the first to file approach is the introduction of the post-grant review process.

Perhaps most damaging, the Patent Reform Act provides a post-grant review process that allows any patent to be challenged ad infinitum. This would increase costs for inventors and jeopardize the value of patents. Significantly, the standard for revoking a patent in this process would be lowered from the current “clear convincing evidence” standard to a “preponderance of the evidence.”

Foreign businesses are already preparing to take advantage of post-grant reviews. “Seeking invalidation of patents is likely to be a part of the patent strategy that Indian generics companies may follow in the U.S.,” predicted the secretary general of the Indian Pharmaceutical Alliance DG Shah in the Economic Times.

Post-grant reviews, coupled with the current practice of governments like Brazil’s and Thailand’s authorizing the theft of patents through compulsory licensing, would damage the American manufacturing industry by helping foreign manufacturers cheaply sell generics. American firms that undertake the costly research required to develop new technology would never be able to match the low prices of these competitors.

Turning TRIPS on its Head: Cross Retaliation at the WTO

Many of you may have heard of the Antigua gambling dispute at the WTO. A classic David vs Goliath story. Antigua, a very tiny island nation complained about a US law that restricted Antiguan internet gambling and betting companies from offering their services to US consumers. The WTO ruled that this law violated GATS (General Agreement on Trade in Services). It therefore authorised Antigua to retaliate. However, what was unique about the authorisation was that Antigua could suspend it's TRIPS obligations to the US (Both TRIPS and GATS are part of the WTO framework).

In other words, Antigua could legally and legitimately sell copies of Hollywood DVD's, without paying any royalties!! However, one is not sure how "valuation" will work here. In other words, Antigua's suspension of US IP rights must enable it to recover only that amount which it lost out as a result of the US breach of a WTO norm (the WTO arbitrator ruled that such loss was only USD 21 million).

How will Antigua work out an IP suspension model that will enable this "equivalence" in retaliation? I propose a model in this article, that I have just posted on SSRN. This model law is of particular importance to India, since it is at the receiving end of WTO non compliance by developed countries, notably the US. The Byrd Amendment Case, where the US has not withdrawn illegal subsidies to it's steel industry (despite complaints by 11 WTO members, including India) is an excellent example in this regard.

It is not fair that India gets hauled up to the WTO on account of TRIPS violations (recall the Mailbox case) and is forced to change its patent regime, whereas the US gets away with WTO violations, despite the WTO panel and appellate body ruling against them. Might is certainly right here... but, thankfully, countries like Antigua and India now have a weapon to even out things a bit....

I am copying both the introduction and the highlights of the proposed IP Suspension model below. I also discuss a novel IP-Tax Model. I would greatly appreciate any comments you have and will gladly acknowledge the same in the final version of the article.

"TURNING TRIPS ON IT’S HEAD: “CROSS RETALIATION” AT THE WTO

"With a sling and a stone young David smote the Philistine giant (1 Samuel 17:40, 49).

INTRODUCTION

The biblical David vs Goliath paradigm plays out very frequently in international trade disputes. In 2003, a tiny island state, Antigua and Barbuda (hereafter “Antigua”) took on the United States (hereafter “US”) in a WTO (World Trade Organisation) dispute, alleging that the US violated GATS (General Agreement on Trade in Services) obligations by effectively foreclosing their borders to overseas internet gambling services. It won at both the panel and the appellate levels. However, to this date, it has been unable to secure compliance by the US.

It’s best option now is to “retaliate” against the US—something that the WTO system permits, as a means of securing compliance. Under traditional norms, Antigua is expected to retaliate in the same sector—for instance, by suspending its GATS obligations to open up it’s various service sectors to US businesses. However, given the highly disparate value of trade between Antigua and the US and the relatively “lower” value that the US places on its service exports to Antigua, such a form of retaliation would not prove a serious enough disincentive to force the US to comply. Besides, given the much “higher” relative value that Antigua places on “US services”, such a retaliation may tantamount to Antigua shooting itself in the foot.

This story is the same one for a number of developing countries, who find that traditional retaliation is more a bane than a boon. The Byrd Amendment case is an excellent example in this regard, where a group of 11 WTO members jointly filed an action against a US law. While eight of these counties sought and were granted the right to retaliate, the only countries that exercised this right by imposing duties were the “developed” countries i.e. the EU, Canada and Japan. The developing countries, namely India, Brazil, Chile and Mexico shied away from exercising their right to retaliate. One can hazard a guess that a part of the reason must have been a lack of confidence in the enforcement machinery i.e. the inefficacy of traditional retaliatory techniques.

In order to achieve a true win, the “David” in our dispute (India, Brazil or Antigua) has to get creative and identify the right “retaliatory” sling that will hurl the stone with enough force to hurt Goliath (US or EU). For developing countries, one such optimal sling would be the suspension of “intellectual property rights” (hereafter IPR) of US or EU entities. The WTO framework contains a number of agreements—one such agreement, TRIPS (Trade Related Intellectual Property Rights) obliges member states to guarantee a minimum level of intellectual property rights protection.

A number of developing countries see the imposition of such minimum standards in intellectual property (hereafter “IP”) as harmful to their national interest and are likely to jump at the opportunity to suspend them, particularly in relation to foreign entities. The DSB (Dispute Settlement Body) of the WTO recently granted permission to Antigua to deploy this “TRIPS suspension” sling. Since the retaliation is not under the same agreement which is the subject matter of the dispute (“traditional retaliation”), it is often referred to as “cross retaliation”.

This is not without precedent. In the Bananas dispute, the WTO arbitrator permitted Ecuador to cross-retaliate by suspending obligations under TRIPS (hereafter “TRIPS suspension” model). However, Ecuador settled the case with the EU and never acted upon this authorization. We are therefore devoid of any effective precedent to see what kind of TRIPS suspension model would work well. This paper evaluates some potential models that might work optimally in these circumstances.

Absent some clarity on how a “TRIPS suspension” model would be implemented, developing countries may be reluctant to adopt such strategies. Indeed, this is a great worry in the Antigua case, with Antigua not specifying how it intends to work the “TRIPS suspension” model and recover only that which is due and no more. Indeed, at this stage, Antigua has not put in place any domestic legislation/executive order under which it can suspend the intellectual property rights (IPR) of US entities. Such uncertainty is likely to be exploited by the scofflaw state i.e. the US. Developing countries need to therefore think through some of these models and implement them domestically, so that an effective suspension can be achieved as soon as the DSB authorizes cross retaliation.

Apart from the normal models that have already been alluded to in the literature, this paper discusses a potentially new “IP-tax” model. In essence, such a cross retaliatory model would entail India or Antigua imposing a special tax on IP goods from the US, along with a price control mechanism that would ensure that the added taxes are not passed on to the consumer.

As one can appreciate, fashioning effective remedies that compel the scofflaw state to comply is of critical importance for the fairness of the world trading system—particularly when the complaining member state is an economically weaker “developing” country. Some cross retaliation models recommended in this paper fit well within the current framework of the WTO. For others to be deployed, amendments need to be effectuated. Given the current politics at the WTO and uncertainties involved with cross retaliation, one is not certain if these proposed amendments are achievable in the near future. Nonetheless, such amendments will go a long way towards making the WTO framework more meaningful to a large number of developing countries that continue to see it as representing an inequitable bargain.

This paper also highlights a paradox, albeit an obvious one. Cross retaliation is often treated as an exception to the standard “retaliatory” mechanism, wherein the complainant lists a range of products or services originating from the scofflaw state on which it intends to impose prohibitively high tariffs or other restrictions until compliance by the latter is secured. In other words, a complaining member has to first “retaliate” in relation to the same agreement which is the subject matter of dispute. If this is not likely to secure compliance, it can retaliate vis a vis other WTO Agreements, which have nothing to do with the dispute at hand. Indeed, such a hierarchy wherein cross retaliation is conferred a secondary status is mandated by the express wording of the Dispute Settlement Understanding.

In most cases where developing countries fight against market barriers erected by developed countries, cross retaliation by suspending intellectual property rights of developed country companies is a more effective remedy, in that it is more likely to secure compliance by the scofflaw state. As will be shown in this paper, it also fits conceptually better within the world trading system and what it stands for. To this extent, it needs to be positioned as the primary retaliatory mechanism for developing countries and not just a secondary resort. Since developing countries constitute the majority at the WTO, such a paradigmatic shift will go a long way towards preserving the “fairness” and legitimacy of the WTO.

Although this paper specifically names the US, EU, Antigua, Brazil and India in its various examples, one could very well substitute the name of any other WTO member. In other words, the models/strategies enunciated in this paper could apply to any WTO member state, though they are more likely to be used by developing country members against developed country members that erect WTO inconsistent market barriers."

OPTIMAL MODEL

All of the above models need to be domestically legislated upon to become applicable. Indeed, as noted earlier, Brazil is considering amending its law to provide for a cross retaliatory mechanism. It is advisable that developing countries begin the process of working through these models and legislating appropriately. This will help reduce uncertainties associated with using cross retaliatory techniques. Also, it will help countries immediately deploy such strategies, after they have secured an order to this effect from the WTO. Although Antigua has secured an order to cross retaliate, nothing in its domestic regime permits it to do so at this moment. This will no doubt delay its deployment of cross retaliation.

Based on the above discussions, an optimal model in the context of the Antigua-US dispute would be as follows. Antigua introduces a domestic legislation titled “TRIPS Suspension”. This legislation would stipulate as below:

1. In the event of a WTO ruling permitting Antigua to cross retaliate by suspending TRIPS obligations against any member state, all categories of IP rights (patents, copyrights, designs, semiconductors, regulatory data protection, plant varieties) belonging to such member state shall stand suspended. This is notwithstanding the guaranteed protection of rights under the various IP legislations in Antigua.

2. Any new rights that are subsequently registered stand suspended from the date of commencement till the date of removal of the inconsistent laws or till the time that the parties settle. Such determination of dates shall be made exclusively by a designated government office/person. Owing to issues of consumer confusion, trademarks and geographical indications are not included within the category of “suspended IP rights” at this initial stage.

3. Provided however that any Antiguan entity shall ensure that it does not sell the product/service using the suspended IP rights to a WTO member state where the concerned IP right is in active force. Any transgression in this regard shall entail a cause of action only against such violator and not against the government of Antigua.

4. Provided also that any rights under any of the other international conventions (e.g. Berne Convention, Paris Convention) that are not incorporated into TRIPS or any bilateral treaty that are still in force and for whose breach independent causes of action can be maintained by the scofflaw state, shall not stand suspended. Any breach of such other conventions shall entitle the IP rights owner of the scofflaw state to take action against the Antiguan entity that uses its IP right in contravention of such other international convention.

5. Subsequent to a WTO ruling granting Antigua the right to cross-retaliate, any domestic or foreign entity or individual can register with a designated government office (Patent Office, Copyright Office etc) and declare its intention of working the suspended IP rights. Such entities would then have to file statements each month or quarter of how they have used the “suspended” IP and the amount of profits that are made from the sales of goods/services made using the “suspended” IP, notwithstanding the fact that such IP may only constitute a small part of the overall product/service. Provided however that if the entity using the suspended IP is a foreign entity, then none of the profits shall be repatriable, but have to spent within Antigua. A government office/person shall be entitled to audit accounts etc of the said entities to ensure that their filings are accurate.

6. The government office/person mentioned above shall issue a notification when Antigua reaches an agreement with the member state or if the scofflaw state withdraws the offending measures. A determination in this regard shall be the sole prerogative of such government office/official. Upon such notification, any Antiguan entity using suspended IP shall be entitled to an automatic compulsory license to work the suspended IP in question for the remainder of the term of the IP i.e. till the IP right would have naturally terminated under Antigua’s domestic IP laws. The royalty rates shall be fixed at the sole discretion of designated Antiguan officials.

7. This government office/person shall also issue a notification when the profits by all entities using the suspended IP (whether Antiguan or foreign) match up to the level of nullification i.e. USD 21 million in Antigua’s case. Upon such notification, an automatic compulsory license shall be issued to all Antiguan entities using such suspended IP. Here again, the royalty rates shall be prescribed at the sole discretion of designated Antiguan officials. If the year (one year of cross retaliation) comes to an end and the scofflaw state has still not withdrawn the offending measures or reached a settlement with Antigua (to be determined at the sole discretion of Antigua), the compulsory license terminates. And the Antiguan entity in question is entitled to use the IP for free i.e. the position reverts to the pre-compulsory licensing days.

8. If working the above model does not yield satisfactory results within a year (because domestic companies cannot work patented technologies/semiconductors/plant varieties and/or the copyright/design markets are very small), then trademarks and/or geographical indications belonging to the scofflaw state may be suspended. However, in such a case, strict labeling requirements must be insisted upon to safeguard against potential consumer confusion.

9. The law ought to clearly state that the ownership of any “suspended IP right” cannot be transferred. If cross retaliation becomes a credible threat, an IP owner from the scofflaw state (such as the US) may have the IP transferred in the name of one of its subsidiaries in another country. Therefore, any transfers of IP ownership ought to be prohibited, starting from the date when the member state obtains a favourable order from the WTO stating that the scofflaw state is in breach of a WTO commitment.

10. If there is a conflict between this “TRIPS suspension Act” and any of the existing IP legislations, this Act shall prevail.

Copyright 101 by Microsoft.

I came across a very angst ridden article on Microsoft's new IP curriculum. The full text of the article can be found here.

Basically the author seems upset about the attempts of Microsoft to brainwash children with an education program relating to copyright protection. The awareness program is based on the premise that if kids knew about the criminal repercussions and law relating to copyright infringement they would be less likely to indulge in it. Fair enough I guess but I don't see the chances of children these days taking to this point of view very easily. Specially when I think of it in the context of my younger brother who seems to go to school only to swap pirated game cds. Apart from that I'm assuming most infringers are adults who really can't be put through a crash course on copyright at their age.

I'm all for IP education amongst the youth but the wrong message might possibly be sent out by one sided programs which fail to highlight things like fair use provisions in IP regimes. Also, although I feel that Microsoft is entitled to start awareness programs if it wants to there are a few concerns:
1. What is the point of such a program when most infringers are probably adults.
2. What are the repercussions for other countries. Is Microsoft really reaching out to infringers if it concentrates on the USA when Canada, China and Russia are the big infringers in the game?
3. Is it appropriate to include content which may be biased in the EDUCATION curriculum for children?
4. What are the repercussions for developing countries like India? Are we going to find big companies insisting on invading our classrooms as well?
5. Although I can understand the effort is this really any manner in which infringement can be effectively curbed?

GIs, TRADITIONAL HANDICRAFTS AND INCENTIVES FOR INDIVIDUAL INNOVATIONS

A lot has been said about Geographical Indications (GIs) and there effectiveness in securing community rights, some may call them Brand rights, in a community’s collective heritage and to protect consumer interests as well. But do GIs accrue any benefit or recognition to an individual from the community, who has made a particularly notable improvement to an existing product, say traditional handicrafts, on which GIs exist? In other words, do GIs preclude simultaneous existence of individual Intellectual Property Rights in the form of Copyrights or Industrial Designs, in traditional handicrafts? The analysis which shall follow is based on excerpts from my third semester paper on protection of traditional handicrafts. The fundamental premise on the basis of which I worked to build a logical structure was that there exists a difference between “industrial handicrafts” and “traditional handicrafts” (This difference may appear hackneyed to most). Until the promulgation of the Geographical Indications of Goods (Registration and Protection) Act, 1999, the working definition for “handicrafts” in India was the one prescribed by Task Force on Handicrafts in 1989 as:

“Handicrafts are items made by hand, often with the use of simple tools, and are generally artistic and / or traditional in nature. They include objects of utility and objects of decoration.”

Subsequently, “traditional handicrafts” were sought to be protected by way of Geographical Indications (GIs) under national laws as provided by TRIPS agreement. Atleast, as far as I understand, nowhere does the GI Act restrict an authorised user from seeking simultaneous protection under Designs Act, 2000 or Copyright Act, 1957. Following this conclusion, one had to interpret the Designs Act and Copyright Act together. Both “industrial handicrafts” and “traditional handicrafts” fall within the scope of “article” as defined under s.2(a) of Designs Act. We know that the design right under s.2(c) of Designs Act is granted only to the design of an object and not the object itself. But then what constitutes a “design” under Designs Act would be the next question. s.2 (d) of the Designs Act defines “design” as:

“…… only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the final article appeal to and are judged solely by the eye; but does not include ………………….any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957.”

The first part of the definition may bring only “industrial handicrafts” within its satellite meanings, but not “traditional handicrafts”, since the definition refers to an “industrial process”. Again, what constitutes an “industrial process” is not clear. Does it refer to any process in an industry? If so will traditional handicrafts fall within the definition of an “industry”? Yet for the sake of the argument, I proceeded with the assumption that traditional handicrafts cannot be accommodated in the above definition.

It has to be borne that the Designs Act grants design right only to non-functional aspects of the design. So if a particular design is predominantly functional, it cannot qualify for a design right (Amp. v. Utilux [1972] RPC 103 (HL)). If it has both functional and aesthetic aspects to it, then the latter may be granted a design right. Further, moving to the exception provided under the aforesaid section, s.2(c) of the Copyright Act, 1957 defines “Artistic Works” to mean:

(i) A painting, a sculpture, a drawing (including a diagram, map, chart or plan) on engraving or a photograph, whether or not such work possesses artistic quality,

(ii) A work of architecture

(iii) Any other work of artistic craftsmanship

In George Hensher v. Restawile Upholstery (Lancs), the Court felt that:

“ the rationale behind bestowing copyright on a work of artistic craftsmanship is to protect the man who puts on to the market articles which are the products of his own handicraft, from reproduction whether by hand, machine or otherwise”.

Accordingly, it was deemed that “artistic craftsmanship” is a composite phrase and may be considered to be “Work of Art”. However, a distinction was sought to be drawn between “artistic work of craftsmanship” and “work of artistic craftsmanship” and “Work of Art” was accordingly imputed the latter meaning. This means that artistic quality of the work is irrelevant and so s.2(c) of the Copyright Act includes “industrial handicrafts”. I am not sure of this conclusion since the general practice thus far has been to grant registration to handicraft designs under the Designs Act.

If “Work of Art” includes an object and/or the features of an object, it means that such object and its features are subject-matter of copyrights and so they cannot be registered under the Designs Act. If it is argued that industrial handicrafts may have utility or “functional features” in addition to aesthetic features and so such aesthetic features may alone be given design registration, does it mean that functional features may be protected by Copyrights? On one hand, English Courts have held that the “functional features” of handicrafts are not protected by copyrights since; copyrights protect only the expression of an idea and not the idea or the rationale behind the idea. On the other hand, a few Indian Courts have erroneously held that Copyright law is meant to protect “artistic works” which are “functional” in nature (Escorts Construction Equipment Pvt. Ltd. v. Action Construction Equipment Pvt. Ltd.)! This goes against the very grain of Copyright jurisprudence.

So, “artistic craftsmanship” under s. 2(c) of the Copyright Act includes “industrial handicrafts” and their non-functional features. But does it include “traditional handicrafts”? The answer is an emphatic no since; the greatest hurdle of all in obtaining a copyright in “traditional handicrafts” is to trace their authorship to one individual author’s originality and the imprint of his personality. Although originality has not been defined in the Copyright Act, since “traditional handicrafts” are acknowledged to be the products of a communal activity, no individual may lay sole claim over it. If one decides to grant copyrights under the Copyright Act to everyone in the community, then it would result in “Tragedy of Anti-Commons” as described by Michael Heller i.e. multiple owners would end up excluding each other of the ownership which would require every new user to obtain licenses from every owner making it exhorbitantly expensive. This means that “traditional handicrafts” are not subject-matter of protection under s. 2(c) of the Copyright Act, 1957.

The interesting conclusion which one reaches is that under s.2 (d) of the Designs Act, both “industrial handicrafts” and their designs are precluded from getting design rights since they are subject-matter of the Copyright Act; however, “traditional handicrafts” may qualify for protection under Designs Act since they are not eligible subject-matter under Copyright Act. This conclusion too does not hold water in the light of the provisions of s.4 of the Designs Act; s. 4 (b) of the Designs Act bars the grant of design rights to “traditional handicrafts” which already exist in public domain. Also, s.4(a) prohibits the registration of a design which is not “new” or “original”. Though “new” has not been defined, s. 2(g) of the Designs Act defines “original” in relation to a design as:

“….originating from the author of such design and includes the cases which though old in themselves yet are new in application”

So, though designs of “traditional handicrafts” do not enjoy protection under Designs Act, their “new use” may get design rights. This virtually leaves traditional designs wide open for exploitation. Summing up the deductions arrived at in the preceding sections:

1. “Industrial Handicrafts” differ from “traditional handicrafts”, both of which appear to fall within the scope of s.2 (a) of the Designs Act.
2. Since “industrial handicrafts” are subject-matter of s.2(c) of Copyright Act, they are not eligible for protection under s.2(d) of Designs Act. “Traditional handicrafts” may get design rights since they are not subject-matter of Copyright Act.
3. However, s.4 (b) of Designs Act bars grant of design rights to “traditional handicrafts” since they already exist in public domain; but s.2(g) of Designs act grants design rights to any person for “new use” of traditional designs, to the prejudice of the indigenous groups

Considering all the aforementioned reasons, I concluded that creativity of an individual belonging to an indigenous group, in traditional handicrafts cannot be protected under Copyright Act, 1957 or the Designs Act, 2000. Subsequently, I corresponded with Mr.Dev Saif Gangjee, Research Associate at OIPRC and Lecturer at LSE, whose M.Phil thesis is a veritable mine of information for anyone who is interested in understanding the position of traditional handicrafts under TRIPS. He was patient enough to respond to my doubts and broadly concurred with my conclusions saying “GI system is inappropriate for highly innovative individuals”.

He also went on to state that such people had “the option of registering a design or obtaining copyright in their works if they are sufficiently creative and that all the GI system protects is the name/designation - it does not stop outsiders from copying the product itself”. He also opined that “Either a handicraft is conventionally 'traditional' and faithfully follows the pattern (in which case there may be limited space for originality and innovation) or it is based upon traditions but also innovates and departs from the pattern (in which case it could be the subject matter of mainstream IP protection)”.

My first contention would be how is one to judge what is “sufficiently creative” and this is a question which both Mr.Basheer and Ms.Yashasvini have dwelt at sufficient length in their earlier posts on the ECB case. Also, can such an innovation, which is based on tradition and yet departs from the pattern, continue to enjoy GI protection despite such departure from tradition? If the answer is ambiguous and unsatisfactory, and a proper way of rewarding individual creativity is not devised, GIs might just end up creating a rigid iron cage making traditional handicrafts stagnant. This would strengthen the arguments of those who believe that copying of traditional designs in new contexts might just help retain people's interest in them and the culture which they represent. A regulated but unimaginative market is not exactly a proper substitute to a chaotic and lawless market. One could probably take a cue from the law of patents. When patents of innovation and addition may be granted on an existing patent, why should one deprive artists, who make modifications to existing forms of traditional art, from some form of protection? The concept of ancillary rights is not a new one, but its extension to traditional handicrafts has not been tested hitherto. Today, when India has a booming economy and is exploring various avenues of sustaining its pace, it is surprising that the potential of traditional handicrafts has not been fully appreciated. The craft or handicraft sector is the largest decentralised and unorganised sector of the Indian economy, and is among India’s largest foreign exchange earners. The number of people involved in the making of handicrafts is about twenty-three million making it the second largest employment sector, next only to agriculture. Besides, traditionally in India, cottage industries like handicrafts and handlooms have served to alleviate poverty by promoting rural entrepreneurship. The greatest advantage is that the craft sector contributes the least to cultural and social imbalance. A solution needs to be worked out before rapid mechanization in the manufacture of handicrafts slowly edges out traditional methods of making them.

SpicyIP Scholarship: IP and the Transformation of Generic Supply

1. IP and the Transformation of Generic Supply:

In an outstanding article, Ken Shadlen examines the relationship between intellectual property (IP) and public health, with a focus on the extension of AIDS treatment in the developing world. It's titled "The Political Economy of AIDS Treatment: Intellectual Property and the Transformation of Generic Supply" and the citation is "International Studies Quarterly 51 (September 2007), pp. 559-581".

I reproduce the abstract below:

"While most of the literature on IP and health examines the conditions affecting poor countries’ capacities to acquire essential medicines, I show the distinct—and more complicated—polit- ical economy of production and supply. IP regulations alter the struc- ture of generic pharmaceutical sectors in the countries capable of supplying essential medicines, and changes in market structure affect actors’ economic and political interests and capacities. These new con- stellations of interests and capacities have profound implications for the creation and maintenance of political coalitions in support of on-going drug supply.

The result is that the global AIDS treatment campaign becomes marked by mismatches of interests and capacities: those actors capable of taking the economic, legal, and political steps necessary to increase the supply and availability of essential drugs have diminished interest in doing so, and those actors with an interest in expanding treatment may lack the capacities to address the problem of under- supply. By focusing centrally on actors’ interests in and capacities for economic and political action, the article restores political economy to analysis of an issue-area that has been dominated by attention to inter- national law.

And by examining the fragility of the coalitions supporting the production and supply of generic drugs, the article points to the limits of transnational activist networks as enduring agents of change.

Those interested in a copy may write to Professor Shadlen at K.Shadlen@lse.ac.uk.

2. BRICS and their Role in Access to Essential Medicines:

In an excellent article, Professor Peter Yu posits:

"Most discussions on the public health implications of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights focus on the right of less developed countries to issue compulsory licenses and the need for these countries to exploit flexibilities within the TRIPs Agreement. While these issues remain important, there are other means by which countries can enhance access to essential medicines. Instead of revisiting the debate on the TRIPs Agreement or its compulsory licensing arrangement, this article explores the possibility for greater collaboration among the BRICS countries (Brazil, Russia, India, China, and South Africa) and between these countries and other less developed countries.

This article begins by offering a brief discussion of each BRICS country in the area of international intellectual property protection. It advances the hypothesis that, if the BRICS countries are willing to join together to form a coalition, it is very likely that this coalition will precipitate a negotiation deadlock similar to the historic stalemate between developed and less developed countries shortly before the negotiation of the TRIPs Agreement.

The article nevertheless questions whether the BRICS countries can build a sustained coalition in light of their very different historical backgrounds; the divergent levels of political, social, economic, and cultural developments; and the well-documented historical failures for less developed countries to build or maintain effective coalitions. This article therefore suggests that it may be more realistic for less developed countries to enter into alliances with one or more of the BRICS countries.

The article concludes by highlighting the role that the BRICS coalition or these partial BRICS alliances can play in the international intellectual property regime. It discusses four coordination strategies through which less developed countries can strengthen their collective bargaining position, influence negotiation outcomes, and promote effective and democratic decisionmaking in the international intellectual property regime. These strategies include (1) the initiation of South-South alliances; (2) the facilitation of North-South cooperation; (3) joint participation in the WTO dispute settlement process; and (4) the development of regional or pro-development fora."

Are Indian Software Firms Innovative?

SpicyIP has, in the past, lamented about the dearth of innovative products from Indian software firms. And our previous posts queried as to why Indian IT majors never really made the transition from "services" to "products".

In an excellent article, one of my favourite economists, Ashish Arora argues: "...many of the leading Indian firms have tried to develop products, with limited success. The lack of success ought not to surprise anyone. Penny pinching and risk averse management habits ingrained while growing in an infrastructure and capital scarce and labor abundant environment are unlikely to make for successful technology innovators. Development organizations geared to fulfill requirements laid down by clients are unlikely to be able to divine the needs of as yet unknown buyers of their product, and nor are sales organizations used to answering RFQs best suited to sell a product that the customer has not yet felt a need for."

On a different note, I had a heated exchange last night with a friend who argued that the initial impetus for the software sector in India came from favourable government policies and an enlightened bureaucarcy. I countered, arguing otherwise: the key reason why software firms sprung off so well at the initial stage was because of less interference ("benign neglect") by the government. In other words, software firms didn't need a specific "license" to operate in a "license raj" era. Also, since they operated as "services", a number of regulations on "manufaturing" carved out by the Fabian socialist state model engendered by Pandit Nehru did not apply to them. On this point, Arora argues as below:

"Athreye (2005a) argues that during the crucial years of its development, the software industry flew “under the radar”. The domestic market was small (and therefore there was little to be gained from protection) and as a service, it was naturally exempt from many of the laws and regulations that have stifled the growth of Indian manufacturing.

Neither were the large investments in the 1960 and 70s in science and engineering directed at software. Instead, the objective was to supply the manufacturing sector, whose slower-than-hoped-for growth resulted in the excess supply of engineers described to earlier. In more recent years, of course, the software industry and its industry association, NASSCOM, have come to exercise substantial political influence and helped craft favorable public policies. But that is the consequence of its success, not its cause."

Spicy Tidbit: The words "Indian" and "National" to be used only by government institutions

The All India Council of Technical Education has come up with the condition that private institutions may no longer use the words "Indian" or "National" in their names any longer. Many institutions have gotten their signboards re-painted to comply with this directive fearing derecognition as a consequence. The Times of India has reported this as a copyright issue though it concerns the Emblems and Names (Prevention of Improper Use) Act which doesn't prohibit the use of these words.

The problems with this directive are many.
1. Why only educational institutions? Why not ban the use for restaurants, malls etc.
2. Is the use of these words really misleading? What's in a name after all?
3. Under what authority has such a directive been formulated considering the law clearly allows the use of these words.

Opposing the 2002 decision of AICTE, Selvam Trust on Monday tossed a question for a SC bench comprising Justices Altamas Kabir and J M Panchal to mull - can there be a state monopoly over the words "Indian" and "National".

The full article can be found here.

SpicyIP Tidbit: Apple to enter the gaming market???

Though this might take a while to enter the Indian scene, gaming fans across the world are all set to welcome Apple into the gaming foray! The recent trademark application requests protection of the trademark "APPLE" against products that classify as "toys, games and playthings, namely, hand-held units for playing electronic games; hand-held units for playing video games; stand alone video game machines; electronic games other than those adapted for use with television receivers only; LCD game machines; electronic educational game machines; toys, namely battery-powered computer games." What's getting fans even more excited is that this comes not long after a patent filed by Apple for a multitasking gaming touchscreen.

Since this has been generally sending waves across the world, let us Indian gaming buffs keep abreast of the situation. Keep an eye out: Computers, Apple TV, Ipod, Iphone... Igame next on the cards??

SpicyIP Tidbit: Technology Transfer Group-IIT Kharagpur

The students of IIT Kharagpur have launched an initiative called the Technology Transfer Group (TTG) in collaboration with the Sponsored Research and Industrial Consultancy Cell (SRIC) of IIT Kharagpur to create a comprehensive database of all the research initiatives undertaken by the students and faculty of the Institute and to ultimately ensure that the technologies developed are commercialised. Special emphasis is being laid on IP protection to such technologies thanks to the involvement of the Institute’s department of Law, the Rajiv Gandhi School of IP Law. Thus far, 10 broad areas of technology have been identified with over 160 projects being submitted for evaluation. Further details may be obtained at http://www.ttg-sric.iitkgp.ernet.in/index.htm.

India Pakistan and IP

India and Pakistan are battling over India's attempts to get GI protection for Pashmina. Kashmir's pashmina is different from its Australian variant but the problem is that over the years it has started being produced in India, Pakistan, Nepal and China. Apart from this the GI application is being opposed by Pakistan as it wants its Pashmina to also be given protection.

The Kashmiri industry feels that the Pakistani product is not of the same quality.

Kashmir boasts of producing high-quality Pashmina products through a tedious, traditional, manual process that originated there.

The Kashmiri handicraft industry has been hurt by years of conflict as well as competition from lower-priced products and fakes. Further delay in getting a geographically specific patent will likely mean more hardship for Kashmir's Pashmina business.

The full article can be found here.

SpicyIP Event

Mock Trial at Delhi University
Under the aegis of the 5th India Project Intellectual Property Rights Summit jointly organised by George Washington University Law School (GWU Law), Confederation of Indian Industry (CII) and Intellectual Property Owners Association (IPO), a mock trial is scheduled to be held on 25th February, 2008 in the Convention Hall at Delhi University. The Summit itself will be held from 24th February- 1st March 2008. The past editions of this Summit have boasted of the who’s-who in the US and Indian IP Industry and this year’s edition too promises to be bring together a galaxy of legal luminaries. To obtain the brochure of the Summit, visit www.ipo.org.
The broad objectives of the Mock Trial are to understand the nuances of winning a patent case both at the trial and appellate fora. The case itself deals with what has become the symbol of vibrant IP litigation in India- s.3 (d) of the Patents Act. Following is the statement of facts of the Mock Trial:

FACT PATTERN OF MOCK COURT AT DELHI UNIVERSITY, FEB 25 2008

1. Form I of paroxetine hydrochloride anhydrate was launched as drug LIPAX1 by BigPharma in 1995 in the US and India.
a. Form I contains no water and is relatively unstable when it absorbs water.
2. Form I of paroxetine hydrochloride anhydrate is disclosed in BigPharma’s ‘001 patent obtained in many countries including the US. There is no patent for Form 1 in India.
3. Form II (paroxetine hydrochloride hemihydrate) is claimed in BigPharma’s ‘002 patents that issued in 2005 in the US and in India under the Patents (Amendment) Act, 2005.
a. The ‘002 patents in the US and India contain only one claim -- “Paroxetine hydrochloride hemihydrate.”
b. Form II contains one molecule of water for every two molecules of paroxetine hydrochloride; Form II is easier to handle than Form I. Form II is both stable up to 120°F (thus can be stored at room temperature) as well as has 50 percent faster absorption in the body so that it becomes active within an hour instead of 1.5 hours for Form I.
c. The ‘002 patent is active in 2008 in the US and India.
4. BigPharma launched Form II as drug LIPAX2 in the US and India in January, 2006, at about the same time as the expiration of BigPharma’s ‘001 Form I patent in the US.
5. Tests conducted by GenEric in 2006 using new equipment developed after BigPharma ‘002 patent issued in 2005 showed that small amounts of Form I (1 part per 1000) convert to Form II when Form I is stored above 40°F for a period of one week or more.
6. No one knew or suspected that Form I could convert to Form II prior to the grant of BigPharma’s ‘002 patent.
7. GenEric obtains invalidity and non-infringement opinions regarding the ‘002 Form II patents in the US and India.
8. In 2007, GenEric notifies BigPharma that:
a. GenEric would make generic LIPAX2 in the US and India; the generic LIPAX2 would contain pure Form II as the primary active ingredient.
b. GenEric does not infringe BigPharma’s ‘002 patents in the US and in India because the ‘002 Form II patent claim is non-patentable subject matter and/or invalid.
9. GenEric launches generic version of LIPAX2 called GENPAX2 in the US and India in January 2008. GENPAX2 contains Form II as the primary active ingredient.
10. Most LIPAX1, LIPAX2 and GENPAX2 storage facilities in the US and India are maintained at temperatures below about 32°F. Though, the storage facilities in Delhi could sometimes reach temperatures above 40°F in summer. There is no evidence that the temperature of any storage facility did in fact reach above 40°F.
11. BigPharma files lawsuit against GenEric in the US and India, alleging infringement of the ‘002 Form II patent.
12. GenEric files a motion for summary judgment of non-patentable subject matter and/or invalidity.

Issue to be decided:
Is the ‘002 Form II patent claim non-patentable subject matter and/or invalid?

Mr. Augustine and his patented 'tender coconut wine'

'God's own country' - Kerala gives us yet another product to relax and soothe those frayed nerves of yours. 'Tender coconut wine' made from 'tender coconut water' was granted patent (No. 209015) on Aug 16 last year by the Indian Patent Office. (My many thanks to Shamnad our man from Mallu land for directing me to this story.) The patent is in the name of Sebastian P. Augustine a farmer, from Kalsgrod Districtin Kerala, who has won the won the Kera Kesari award in 1998, instituted by the Kerala government to recognize the best coconut farmer in the state.

Please click on this link for the full story and the recipe to make this wine. (Don't you dare infinge the patent though!)

Mr. Augustine is an extremely enterprising man. He's lobbying with the Government of Kerala to make this wine Kerala's tourism USP. After all the vineyards of France are a major draw for tourism. Not to forget our own Goan Feni which I'm sure is one of the reasons for the burgeoning tourist population in that State. Feni by the way has an application in its name pending in the GI Registry. However our bureaucracy as usual is conniving with the dark forces and putting up roadblocks to Mr. Augustine's efforts. As usual ONLY the 'Mint' carried this 'complete coverage'. Full story here.

Getting back to the patent - SpicyIP did a search on the 'GodSent' - India BigPatents Database which threw up two hits for 'tender coconut wine'. While one was the current patent in question, the other was filed by the Coconut Development Board based in Chennai bearing application number 765/CHE/2005 and is still pending to the best of my knowledge. While I haven't been able to access the full texts for the patent filed by the Board I was able to read the abstract on the India BigPatents database and compare it to Augustine's patent pending in the USPTO - at first glance they look rather similar - both are based on seven month old tender coconut, both claim to have no preservatives or colouring agent and both claim medicinal and nutritional value. Obviously we can't tell whether or not the second patent will stand the test of novelty until we read both patents.

Something which struck me rather amusing was the fact that the USPTO patent application filed by Mr. Augustine - 20070178191 claims that this wine will be "a highly healthy, hygienic and nutritional beverage". So I guess they can start handing out this patented wine as a sports drink :-) !

Anyway enough of patents lets raise our glasses to our innovator from Kerala - Augustine - Cheers!

OPEN BOOK SOCIETY: Providing easy access to Academic Writing

Spicy IP is happy to announce the arrival of yet another student initiative that hopes to make academic resources more easily available to the public in general, and students in particular, primarily using the medium of the Internet. The OPEN BOOK SOCIETY, a society registered in Karnataka, is a voluntary body that is founded and run by students across the nation from premier institutions such as the National Law School of India University and the All India Institute of Medical Sciences. Notably, this endeavour has already been endorsed by distinguished members of the academic and legal fraternity such as Honourable Justice AN Ray, Honourable Justice Gulab Gupta and Mrs. Nayanjyot Lahiri.

Hoping to follow resource bases such as Kluwer Online and JSTOR, the Society hopes to digitally archive volumes of various academic journals with due acknowledgment to the authors concerned on an open-access basis completely free of cost! To achieve this objective, members of the society have begun obtaining licences from various Universities and other publishing bodies, scanning the same and developing a website that is easily accessible to all. In an ambitious beginning, the Society has already digitized and uploaded "The Central India Law Quarterly"- one of India's oldest and least accessible journals.

The team at SpicyIP wholly supports this endeavour of helping several students (like myself) have easier, better and inexpensive access to required academic resources. Great job guys!

The first uploaded journal by the Society can be found at http://www.cili.in/

A boost to drug research.

Indian Pharma companies are entering into collaborations with foreign drug discovery companies so as to be able to benefit from the sharing of technology, knowledge and cost benefits. This will prove to be a huge boost to the Indian research scene which so far is in a nascent stage.

Zydus Cadila is the most recent entrant into this synergetic process - working in sync with Swedish firm Kara Bio working on leads on inflammatory diseases.

Advinus, which is developing drugs with multinational drug major Merck, alsohas a discovery programme with the Swiss-based Drugs for Neglected Diseasesinitiative (DNDi), a non-profit R&D organisation, to devise novel therapies for visceral leishmaniasis or kala azar, an India specific disease.³Collaborations bring in synergy and global scale in research efforts.

The investments can be fructified by developing a global blockbuster drug, which will be a huge business opportunity for both the parties,² said VenkatJasti, vice-chairman and managing director of Suven Life Sciences, theHyderabad-based drug discovery company.

The impact of such partnerships is hard to guage considering that the gestation period for the development of a drug can be 10-15 years. However the fact that research is being promoted by such a collaboration is an encouraging sign.

This trend is a sign of the Indian drug discovery segment gaining maturity, said Jasti, citing most of the block buster drugs available inthe world were developed through collaborations.

I suppose the problem with these collaborations will be that the price will reflect the cost of such teamwork. That some of these pharma companies are teaming up to work on health care issues specific to India like kala azar is great because it seems to show a bent of mind aiming towards communities which won't really turn the resultant medication into a blockbuster drug (kala azar is a disease which afflicts the poorest in East India and is a by product of poverty, poor hygiene and poor nutrition levels).

The full article can be found here.

SpicyIP Tidbit: Mosquito-Free Cooler

Vector-borne diseases like malaria and dengue can spread from the most innocuous of places simply because of water stagnation. Most would normally expect open drains to be the primary sources forgetting others which are closer home- air coolers, specifically water tanks in air coolers. Interestingly, there exist government sponsored studies on the role of coolers in breeding of vectors. Thanks to some ingenious thinking by Dr V K Saxena, Dr T G Thomas and Dr Shiv Lal of National Institute of Communicable Diseases (NICD), an effective solution may be at hand at competitive prices. Here’s an article from the Times of India giving the details of the invention and the reason that triggered its creation:

“A cooler with almost 100% efficiency at preventing mosquitoes from entering it and laying eggs will now spearhead India’s fight against vector-borne diseases like dengue and chikungunya. After over six months of research, scientists at Delhi’s National Institute of Communicable Diseases (NICD) have developed a "Mosquito Proof Cooler" (MPC). This new machine, developed jointly by Dr V K Saxena, Dr T G Thomas and NICD director Dr Shiv Lal, has several advantages. Unlike conventional coolers that require continuous cleaning to check for mosquito larvae, MPC needs a clean-up only once in three months. Moreover, it is compact and does not have a single hole for vectors to get through unlike conventional coolers with three detachable sides. The cooler also has a modified water tank and water inlet to takes care of water problems. Unlike conventional coolers which require water to be filled every day, MPC will require refill once in three weeks, even during peak summer months. This is because a special in-built technology does not allow stored water inside the cooler to evaporate.

Saxena, NICD joint director, told TOI that the machine would be a boon, especially in Haryana, Punjab, UP, Delhi, MP, Gujarat, Rajasthan and Maharastra where coolers are extensively used to beat summer’s scorching heat. These states also account for the highest number of dengue cases in the country. Stored water in the cooler tanks is the most favoured breeding place for the deadly Aedes mosquito, which causes dengue. NICD has already applied for a patent for the new invention and is in the midst of talks with two leading cooler manufacturers for transfer of this indigenous technology.

Saxena said: "We took three months to create the prototype. Field experiments over two months found it to be nearly 100% effective. While malaria and dengue vectors were found to be breeding in two conventional coolers used in the trials, not a single mosquito could enter the MPC and lay eggs. To be doubly sure, we introduced juvenile larvae in the water tank of the MPC to see if they emerged as adult mosquitoes. After one week, we found they did emerge but failed to escape from the cooler. Dead mosquitoes were found. This means even if by any chance a dengue or malaria carrying vector does enter the cooler, it won’t be able to come out."

Saxena added: "A metallic barrier has been put above the tank to prevent mosquitoes from entering. Side shutters have been done away with. Once in the market, the price will vary. It will cost a maximum of Rs 300 more than conventional coolers."

Dengue is endemic in several parts of the country. In 2006, 3,288 dengue cases and 38 deaths were reported out of which 1,951 cases were from Delhi. Over 10,000 people were infected with dengue in 1996 and 423 persons had died. Dr N K Yadav, health officer of Municipal Corporation of Delhi (MCD), said: "Over 90% of dengue mosquito breeding is found to be in coolers, especially during September-November. Till now, we have challaned 18,248 households for not maintaining cleanliness. Till November 7, Delhi recorded 502 dengue cases while the suburbs accounted for an additional 43 cases and one death."

Let’s hope that we may have finally gotten rid of a bugging problem!

Recommendation of Traditional Medicine Group to Knowledge Commission

India’s’ healthcare pundits seem to be infusing a healthy dose of ‘lateral thinking’ in the face of India’s diverse healthcare requirements.

Not so much of a paradigm shift in thought patterns as much as it is about trying to fit in some conventional medical wisdom to reconcile India's’ public health concerns , the focus is on leveraging India’s’ repertoire of Traditional Medicine.

The Report submitted by the Working Group on Traditional Medicine to the Knowledge Commission of India indicates that a singular approach to Indian healthcare may not suffice and a pluralistic approach may offer some creative insights on structuring new health care models that blend modern bio med and traditional medicine.

Outlining a ten year agenda that inter alia suggests the constitution of a National Mission on Traditional health Sciences on India, the Report avers that

‘Global health sector trends suggest that Medical pluralism, within which Traditional Systems of Indian Medicine should form a critical component, will shape the future of healthcare. This shift from singularity to plurality is taking place because it is becoming increasingly evident that no single system of healthcare has the capacity to solve all of society’s health needs. India has a comparative advantage and can be a world leader in the era of medical pluralism because it has strong foundations in western biomedical sciences and an immensely rich and mature indigenous medical heritage of its own.’

For the full length report read here

Shoring up Infrastructure and IPR are key recommendations contained in the Report.

The Knowledge Commission is primarily aimed at transforming India into a knowledge based society based on the concepts of access, creation and conceptualization of knowledge and the optimal application of the knowledge into effective services models.

The findings of the Working Group definitely does signify and embody the charter of the Knowledge Commission in all its spirit and intent!

SpicyIP Tidbit: Oriya Lexicon to be published again.

The 76 year old Oriya Lexicon "Purnachandra Bhasakosha " with over 1.85 lakh words and their meanings in English, Hindi and Bengali that was put together by late Gopal Chandra Praharaj, aCuttack-based lawyer and journalist was republished without permission from his family members in 2006.

The District Court passed an interim stay order on the reproduction of the book but the dispute has now been settled with a lower court allowing the Larks Book publisher Mahindra Mishra to go ahead with the publication.

SpicyIP Tidbit: 2nd ARV drug to get patent protection in India.

Johnson and Johnson has gotten patent protection for its new ARV Etravirine - the only ARV to get such protection apart from pharma giant Pfizer's Maravoric last year.

The impact of this drug has not been determined yet and its being watched closely by NGO's and civil action groups who are contemplating filing post patent oppositions. Logically the patent protection will make generic copies of the drug impossible to produce and in a country with an AIDS problem like ours this is highly problematic.

For what happens next watch this space. For the whole article click here.

Traditional Medicine not to get 5 year data protection.

The Government may not grant 5 year data protection to traditional medicines. The whole article can be found here.

The change has been triggered by the Department of Ayurveda, Yoga,Unani, Siddha and Homoeopathy (AYUSH) taking the view that such a protection will lead to similar demands from the allopathic segment.

It was the Department of AYUSH which had suggested such data protection in the first instance. An inter-ministerial committee has also been constituted which has come to the conclusion that such protection must be afforded to traditional medicine.

I don't entirely understand the point of protecting traditional medicine only for five years or how this would work in conjunction with the government's efforts to document all forms of traditional medicine in a combined encyclopedia. Are we trying too many things to try to protect our traditional knowledge instead of focussing on one well thought out way?

SpicyIP Tidbit: 'Sugar free' hassles

Cadila HealthCare has filed a suit against Dabur India for the use of its trademark "Sugar Free" in the marketing of Dabur's Sugar Free Chyawanprakash and has sought damages to the tune of Rs. 25 lakh.

Justice Ahmed at Delhi, has issued a notice to Dabur on Cadila's suit to restrain the former from using the 'Sugar Free' trademark or any other mark that could seek to deceive or confuse the public as under Section 9 (2) (a) of the Indian Trademark Act, 1999.

At least it's pretty obvious that the relations between the two companies definitely have some Cheeni Kum!

The full article can be accessed here.

SpicyIP Tidbit: Roche opposed yet again.

Just when we thought it couldn't get any better, the patent scene in India seems to be heating up, yet again. Roche's anti-infection drug for HIV/ AIDS and organ transplant patients, Valcyte faces yet another opposition after its tumultuous past in the USPTO.

After going past the pre-grant stage without hearing an opposition by two NGOs (Indian Network for People Living with HIV/AIDS and the Tamil Nadu Networking People with HIV/AIDS), Ranbaxy has now filed a post-grant opposition, claiming that the drug has not proved enhanced efficacy than what is already known- as is required under current Indian Law.

Last heard, CIPLA may jump on to this bandwagon, and file for post-grant opposition as well, and Lawyer's Collective was to contest the same in the Madras High Court.

Guest Post: Bajaj vs TVS Patent Dispute

SpicyIP has been reporting on the Bajaj-TVS feud. See here for previous posts. We now have a guest post from Sai Deepak, a very enterprising student from the Rajiv Gandhi School of IP Law, IIT Kharagpur:

SPARKS FLY AS TITANS CROSS PLUGS

“This post will attempt a more detailed look at the issues involved. There are two issues here:

i) Whether TVS infringes Bajaj’s patent?
ii) Whether Bajaj’s patent is valid in the first place?

As regards the first issue, one cannot arrive at a decision without possessing complete details of the technology used by TVS. However, according to TVS, the CC-VTi technology used in Flame has been developed by AVL, an Austria-based consulting firm and independent engine research institute which has to its credit several patents in automotive and automobile technologies. Autobuffs are likely to have heard Dr.Hans List who founded AVL. The CC-VTi technology could be based on AVL’s patent titled “Internal Combustion Engine comprising atleast Two Inlet Valves per Cylinder” (EP0444018).

Bajaj’s patent speaks of twin spark ignition technology and the TVS model uses 3 valves (2 inlet and one exhaust) in conjunction with 2 spark plugs. TVS has countered Bajaj’s allegation by citing the amendment of Bajaj’s Indian patent application on November 5, 2004, wherein its original claim of "An improved internal combustion engine for efficient burning of lean air fuel mixture used in engines working in four stroke principle, characterized in that said IC Engine comprising of…. " was supposedly reduced to "An improved internal combustion engine for efficient burning of lean air fuel mixture used in engines working in four stroke principle, having two valves, characterized in that said IC Engine comprising of….,"(Business Line, 04-09-2007).

In other words, the purported novelty of Bajaj’s invention lies in the conjunctive use of twin spark plugs in a single cylinder with 2 valves, and not the mere use of twin spark plugs in the engine. This is because, a multi-cylinder multi-valve engine would obviously comprise of more than one spark plug, making Bajaj’s invention obvious. This also restricts the scope of the claim to use of twin spark plugs in a single cylinder with only two valves.

Since one is not in possession of Bajaj’s actual Indian patent document, one had to rely on its PCT Application PCT/IN03/000348, to corroborate TVS’s arguments that the scope of the patent is limited. As inferred from the press release by Bajaj dated 03-09-2007, the PCT application contains the same subject-matter as that of the Indian patent, through which Bajaj seeks to acquire protection in 5 countries, notably China.

However, this application does not indicate any such amendment as claimed by TVS, which could mean that such an amendment was made only to the Indian patent application. Funnily, the Indian patent office journal (29-07-2007) refers to the Indian patent as “An Improved Internal Combustion Engine Working on Four Stroke Principle” with the PCT Application sharing the same title whereas the TIFAC database refers to the Indian patent as “Internal Combustion Engine with Improved Combustion Characteristics”. The possible explanation to this could be that the title of the invention was modified subsequent to the grant of the patent.

TVS has further claimed that BAJAJ’s patent should be invalidated on grounds of obviousness, since use of twin spark plugs in a cylinder with two valves was well within prior art. Apart from the example of Honda cited by TVS, I believe that US Patent 5320075 titled “Internal Combustion Engine with Dual Ignition for Lean Burn” granted in 1994, may substantiate TVS’s stance. A few other US patents 4958616, 4177782, 4177783 too speak of twin spark plugs in a single cylinder with two valves.

Both DTSi and CC-VTi technologies are aimed at reducing exhaust emission and fuel consumption through fuller combustion of fuel. The written description provided by Bajaj’s PCT application itself suggests that there are various methods of improving combustion characteristics, some of which include improved ignition timing, improved combustion chamber design, improved valve timing and valve angles, etc.

Through its written description, Bajaj has explained in sufficient detail the disadvantage of using a single spark plug, as opposed to using twin spark plugs located preferably diametrically to each other (US patent 4177783 too contains a similar arrangement). This is because of better-controlled ignition timing in the latter and lesser time taken for the flame to travel during combustion. It has specifically listed the merits of use of twin spark plugs in a lean mixture (a mixture where the proportion of fuel in air is lesser when compared to rich mixture).

The novelty according to Bajaj, also lies in the use of a sleeve to protect the spark plug which is susceptible to exposure to lubricating oil. Such being the case, the emphasis and the scope of protection would be limited to use of twin spark plugs in a single cylinder with two valves, one plug protected by a sleeve. It is interesting to note that of the four patents cited in the International Search Report in the PCT application, 3 relate to inventions only on sleeve, and only one speaks of use of twin spark plugs.

CC-VTi, on the other hand, predominantly is about even combustion of fuel by altering the air-fuel mixture received by the 2 intake ports or valves. Usually, a cylinder has one intake and one exhaust valve. Earlier, the charge (air-fuel mixture) was either subjected to swirl or a tumble depending on the load conditions and speed. The stirred or circumferential motion of charge in the cylinder is called swirl, whereas a motion directed towards the axis of the cylinder is called tumble.

The former is used for a lean mixture and the latter is used for richer mixtures at high speeds. Several patents on the use of these phenomena exist. TVS’s technology combines both these phenomena with 2 intake ports, providing swirl and tumble simultaneously, making the design compatible for both lean and rich mixtures. The degree of swirl would be greater for a lean mixture and the degree of tumble for rich mixture. This design ensures even combustion of fuel in all corners of the cylinder and is further marked by the use of twin spark plugs, which as explained earlier, provides fuller combustion.

This shows that the points of emphases in the designs of both these technologies differ considerably, notwithstanding the use of twin spark plugs in both instances. It was reported that following the victory in a lawsuit against Sri Lankan importer Ranatunga Motor and Chinese manufacturer Taian Chiran Machinery for imitating the Pulsar 180, BAJAJ gained above 9 per cent over its previous close of Rs 2,825.45 to close at Rs 3,080.30. Over 3.75 lakh shares changed hands on the counter (Business Standard, 08-02-2007). If TVS’s contention of invalidity of Bajaj patent is upheld, one can only fathom as to what such a loss could mean for Bajaj, both financially and for its reputation. However, it is surprising that TVS, being a competitor, did not oppose the grant of the patent to Bajaj earlier.

Larry Lessig on Anti-Corruption: Lessons For India

Some of you may already know that the cyberlaw guru Larry Lessig (of the creative commons fame) decided his shift his focus from cyberlaw/copyright to anti-corruption. I suspect this decision came as a result of the Supreme Court decision that copyright extension for Mickey Mouse was perfectly constitutional--despite Larry's all out war against the extension and his powerful arguments in court that this was unconstitutional and bad policy.

I am not entirely sure if the "constitutionality" question is an easy one--however, there is no doubt that extensions of this sort are bad policy--the artist has already created the work in question and there is no question of a retrospective incentive!! As Larry decries: this is really a no brainer!! An important lesson for India, as Yash Chopra and others put pressure to increase the terms of old Hindi films--an aspect that Kruttika had blogged on earlier here.

Given the perverse influence of money and the ease with which MPAA and RIAA got what it wanted from Congress, Prof Lessig may have felt the need to go to very source of this "perverse" policy making: the influence of interest groups (and campaign donations) on the Hill.

Anyway, here is a brilliant video/audio of his second annual lecture in constitutional law at Stanford, where he speaks about this new project focussing on anti-corruption. Interestingly, he argues that no scholar should continue with his field of specific expertise for more than 10 years--after 10 years, one has to try something new. I've heard that this ideal was more than lived up to by one of India's most renowned physicists--Subramaniam Chandrasekhar, who shifted his area of research focus every 7 years or so.

This video contains some obvious examples of "corruption" in policy making, notably:

1. The copyright extension case, discussed above
2. The FDA ruling that a diet of 25% sugar was perfectly healthy...

He also references some great websites that track where campaign funds come from and how they influence voting on the Hill. He argues very powerfully on our collective responsibility to ensure that there is no "queering" of policy through cash...

Given the focus of SpicyIP on increasing transparency at the Indian Patent office and other IP institutions in India--and making these offices more accountable and less corruptible, this is a topic of special interest to us. And Larry's talk provides us with plenty of inspiration. Those of you involved with IP policy making in India will know that policy making in India is more opaque and guarded than it is in the US. Therefore, our task is a much more uphill one. But we've made a start--and with your support, we can certainly do much more...

Is the Indian drug industry scared of the NPPA?

For all you bleeding hearts out there pining away about pharma companies over-charging on all their drugs here's some good news. The National Pharmaceutical Pricing Authority (NPPA) has become rather active over the last few months - so much so that the drug industry was seriously contemplating moving the judiciary to seek a reprieve. UPDATE: They actually did move the Delhi High Court for some relief and the Court actually asked the Ministry of Chemicals and Fertilizers to look into Ranbaxy’s request to review the NPPA order to fix the price of a key brand.

One would think that the India the world’s generic drug factory would never have problems about pricing issues but that is not the case as SpicyIP has reported previously. The government specifically passed the Drug Price Control Order to regulate the drug prices given the natural tendency of industries to increase their profit. It is easy to say that a free market will ensure the lowest prices but the point is that the market may not be as free as we want. Besides as Giresh Chandra reports the Supreme Court has in the past ordered the government to ensure that essential drugs do not go out of the ambit of the price control. Also the UPA government in its CMP promised drugs at reasonable prices.

Anyway to return to the issue on hand the Ministry is all set to hear both the NPPA and Ranbaxy on this particular issue. Of late the drug industry has been screaming itself hoarse over the alleged ‘anti-industry’ and ‘autocratic’ functioning of the NPPA. The industry claims that while the NPPA has been quick to clamp down on high prices it has refused to review price control orders even when the cost of the raw materials has increased drastically.

A ministerial review panel which is reviewing the drug policy is expected to further bring into its ambit all the 354 essential medicines that account for about 7,000 formulation packs in the market. The pharma industry claims that this would bring half the drug market under the price control regime, the ministry of course says that this actually increases the coverage of the policy only by 7%.

In my opinion while price controls for drugs are necessary at some stage to ensure that the industry does not start inflating the prices artificially, the Government has to start understanding that if drug companies are to survive in this new product patent regime they will have to start investing in R&D which means that drug prices will have to move north. However the rationale of ‘price controls’ is to ensure that drugs are ‘affordable’ but to ensure that drugs and health care are ‘affordable’ to even the poor without further bankrupting them the government has to start implementing an effective national health insurance program. So while the NPPA might have a case for becoming hyper-active over the last few months the government will have to recognize that increasing drug prices are a natural result of a product patent regime and hence it has to balance the problem of ‘affordability’ by other policy initiatives.

Tarceva: Following the Glivec path.

Following closely in the footsteps of the Novartis 'Glivec' battle, the validity of Section 3 (d) and the grant of compulsory licences seem the talk of town this time around in the Pharmaceutical industry. Our readers will remember the recent post on the Roche-Cipla Row.

Generating interest and raising several eyebrows, CIPLA's latest move to ask the Court to revoke the 2007 patent granted to Roche's TARCEVA, again hinges a great deal on the pricing of the drug as well as the availability of the several ailing lung cancer patients in India who have no access to the same. However, Mr. Jaitley arguing for the Swiss giant, stated that the patent was neither new nor involved an inventive step, and furthermore even failed the test for non-obviousness.

An excellent article by Bhuma Shrivastava in this regard is a must read for an insightful and concise analysis:

"A Delhi high court judgment, expected soon, promises to become the second test case in less than a year on the way Indian judiciary balances public health issues and patents owned by large multinational drug makers.

Basel-headquartered F Hoffman-La Roche Ltd is seeking an injunction against a move by India’s Cipla Ltd, ranked among the top three in the country by sales, to introduce in the local market a copycat version of the Swiss firm’s lung cancer drug, erlotinib, sold under the brand name Tarceva.

Cipla has asked the court for the Tarceva patent, granted in February 2007, to be revoked—the first time such a request has been made on a patented drug.

Cipla’s move, seen risky by some, hinges on the argument that the patented drug—costing Rs4,800 a tablet or nearly double an Indian’s per capita monthly income—is out of reach of most of this country’s citizens. According to the Indian Council of Medical Research, at least 90,000 men and 79,000 women are diagnosed with cancer of the lungs and bronchitis in India each year. Those living with lung cancer number some 100,000, estimates Y.K. Sapru, founder-president of Cancer Patients Aid Association, or CPAA, a patient group in Delhi.

The Mumbai drug maker sells its erlotinib version at one-third of the Roche price.

The Roche-Cipla case follows a legal battle that Novartis AG is engaged in since early 2006 with the Indian authorities over the rejection of patent application for cancer drug Glivec (sold as Gleevac globally). Novartis’ challenge that a rule in the Indian Patents Act, 1970, is non-compliant with global trade laws has been rejected by the Madras high court and the company, also Swiss, is separately fighting the patent rejection at an appeal tribunal.

The New Delhi case, which has high profile lawyers fighting for Roche and Cipla, is keenly watched by the drugs industry, patient groups and patent attorneys.

“If Glivec was step one, then Tarceva will be step two. Glivec established the legitimacy of Section 3(D) (the patent rule that Novartis challenged), Tarceva will show what can the patent law do for public health and access to affordable drugs in the face of a patent protected drug,” said CPAA’s Sapru. Section 3(D) bars patenting of slight modifications on existing drugs without substantial increase in efficacy. Leena Menghaney, a drug access campaigner for Medecins Sans Frontieres, said the case will test “how courts and government make drugs available at affordable prices (and) tackle access issues after the drug is patented”. Arguments in the Roche-Cipla case closed on 31 January.

In the court, Cipla, whose legal counsel is Arun Jaitley, also a politician representing the Bharatiya Janata Party in Parliament, contended that the Tarceva patent should be revoked under Section 3(D) as the drug is a mere derivative, or tweaked version, of an older drug. Cipla faces infringement charges and a claim of Rs1 crore in damages.

Tarceva, a new drug for Roche with revenues of about $1 billion (Rs3,960 crore), has the potential to be a moneyspinner. Indicated for non-small cell lung cancer and pancreatic cancer, it is approved in 87 countries for the second- and third-line treatment of patients with advanced lung cancer, says Roche website.

Mindful of the Glivec ruling, Roche’s legal counsel, Abhishek M. Singhvi, also a spokesperson for the Congress, stated in one of the hearings that they were not challenging Section 3(D), but just its application in erlotinib’s case. The managing director of the Swiss firm’s local unit, Roche Scientific Company (India) Pvt. Ltd, Girish Telang declined comment until the court verdict.
Roche has reported Rs13.91 crore of Tarceva sales since April 2006, when it first launched the drug in the country. The revenues of the Indian unit are not known as it is privately held and not mandated to publicly report financials.

Roche’s petition called Cipla’s actions as a brazen “infringement of the legal rights of the plaintiffs (Roche and OSI Pharmaceuticals Inc.)”. Its counsel Singhvi rebutted the Cipla claim that the drug is a derivative of quinazoline, a drug with a patent pre-dating 1995, the cut-off year for grant of patents in India.

Over the course of five hearings, Cipla’s counsel Jaitley argued the patent suffered from invalidity as it wasn’t new, obvious and didn’t involve an inventive step as it was a tweaked version of a pre-1995 drug, which is not eligible for a product patent in India. The specifications in the patent application didn’t sufficiently describe the invention or its claim to improved efficacy and didn’t disclose the drug was a mixture of two polymorphs, or drug derivatives, that qualifies it for rejection under Section 3(D), he contended.

Jaitley appealed for denial of the injunction, saying the patent was new and counterclaim serious. He also asked for a patient-friendly regime, where competition among drug makers could bring the price lower than even the Rs1,600 a tablet that Cipla charges and make affordable drugs available, especially when bulk of the medical costs are met not through insurance coverage.

A patent expert said patient access and affordability issues should be addressed separately through government spending and financing mechanisms such as health insurance. “Will prices of patented drugs alone answer all the problems of access? When 65% of the population doesn’t have access to allopathic drugs, how can drug access be an exclusive problem of patented drugs. It applies to all drugs,” said Krishna Sarma, managing partner of Corporate Law Group, a New Delhi legal firm that has represented Roche to file patents in the past but is not connected with the Tarceva litigation."

Compulsory licensing and Patent Litigation- who would have thought those would have been the buzz words in our Judiciary!

Chikan to be only from UP.

There's good news for the 100,000 artisans in UP working on chikan embroidery as the same will soon be eligible for protection as a GI. The application with the GI Registry at Chennai has been filed.

This is also good news for those trying to promote Indian handicrafts abroad as 56% of the exports of the country come from UP. A figure which will probably rise with the protection being given to chikan work.

The whole article may be found here.

Music concerts in anti-piracy mode

Readers might recall this post on bootlegs of Indian music concerts. Although I spoke only of audio recordings in the post, there is no ignoring the fact that video bootlegs are gradually getting popular as well. For example, I suspect there might have been several mobile phones being waved in the air in the recent Iron Maiden gigs…

The same thing is catching on in Indian classical music (ICM) as well, although not with the same fervour, probably because of the age-profile of the audience involved. Nevertheless, there is a market for videos of full-length concerts that has only begun being tapped. And video bootlegs, even in ICM, do make the odd appearance – in my online meanderings the other day, I came across bootleg videos of full concerts of Hindustani artists Ashwini Bhide-Deshpande and Ganpati Bhat from a very recent music festival in Bangalore.

Which brings me to another post, this time by Prashant, on attempts of the Indian film industry to deal with online piracy. He points to Rajshri.com which has done some great work in putting up films, serials, news clippings and yes, music concerts! (available here), free for online viewing, which are also available as a paid download. It has tied up with two music labels – Music Today and Alurkar Music – to put up concerts of two stellar music festivals – the India Today-India Gate festival, and the Sawai Gandharva festival at Pune. The selection includes some classic performances by Chaurasia with Zakir Hussain on the tabla, and Jasraj with Sanjeev Abhyankar on the vocals – all of them in their prime, from about 15-20 years ago.

Like with the films, this is a great move by Rajshri and the music labels to counter piracy in any small way possible.

Arguably, the rates for download are not attractive – a minimum of Rs 100 for a 1-1.5 hour concert. And yes, the idea of streaming video doesn’t get folks in India too excited, what with cables at sea (sic), excruciatingly slow connections, and unlimited download packages still not de rigueur as they should be.

However, they do tap into a foreign market for which access, especially to ICM, is extremely limited. Concert recordings are anyway hard to obtain, and most outside India rarely get to hear live performances. One might have to wait for years to listen to them, when artists are well past their prime, not unlike Iron Maiden and Deep Purple in India…

So, bottomline, it is good to know that even ICM, beleagured as it is with conservatism and orthodoxy, is moving with the times. Here too, piracy is being tackled with some innovative marketing.

Spicy News: UK Trademark Office Invalidates "MASALA"

Ilanah Simon, who teaches at UCL, London and is one of the bloggers at the internationally renowned IPKat blog brings us this extremely spicy news:

" The word mark MASALA was invalidated by Mr Hearing Officer Foley. He found that the sign, a constituent verbal component of various Indian spice mixtures, was both descriptive and customary in the trade for“cooked vegetables” in the Class 29 specification, “preparations made from cereals” in the Class 30 specification, and “foodstuffs comprising or made from any of the aforesaid goods”.

The mark was merely descriptive for “infusions” and “tea and tea-based beverages”. However, it was valid in relation to beers and soft drinks. The IPKat thinks this is the right decision - he's not sure how this one got on the Register in the first place".

I just flipped through the decision and it's a soundly reasoned one. Interestingly, the registrar relied on an Oxford dictionary definition of the term "masala" to mean "any of a number of spice mixtures ground into paste or powder for use in Indian cookery”. 

It'll be interesting to see how our Indian press reports on this issue--and the kind of masala that they are bound to add--readers will recollect emotionally heated press reports over the patenting of Basmati, Neem and Turmeric and more recently Yoga.

Of course, we at SpicyIP have a vested interesting in closely following "spicy" developments of this nature...

A step ahead. A step behind.

The Motion Picture Association's Operation Blackout has resulted in the arrest of 117 people in India. In Australia 426 burners have been seized along with 661,411 pirated optical discs ; In China 211 raids have been conducted and 676,384 pirated optical discs seized and similar statistics can be quoted for Hong Kong, Malaysia, Philippines, Taiwan and Thailand.

The operation targeted the illegal recording of movies once again and also attempted to spread awareness regarding piracy. Although the result of this operation has probably saved producers millions they would have lost to piracy I'm apprehensive about how successful or even viable such operations may be.

Motion Picture Association senior vice president and regional director, Asia-Pacific Mike Ellis as issued a statement saying that at this rate they will be able to stay one step ahead of the "pirates" but it seems like there's a hard battle ahead of them yet.

The full article may be found here.

Firstly, although the number of seizures and raids have increase almost 300% since the last operation in May 2007 it still isn't substantial. Secondly, i don't know whether attempts to raise awareness will help considering most people who deal in pirated wares do so knowing about the legality of what they are doing. Thirdly, the price difference between an original and a pirated version of a film or music is so great that people are willing to risk viruses on their computers, shady markets and poor quality. Lastly the potential for information dissemination on the internet is so great that it may be a challenge for the MPA even to stay a few steps behind.

Tiger Trademark dispute comes to a head

The trademark dispute between Britannia Industries and French dairy and beverages giant, Groupe Danone is reaching a crucial stage as the matter is expected to come up in Court in Singapore early next week. The parties have the option of reaching a settlement at a pre-trial conference or going in for a full trial.

The conflict is around the attempts of Danone [which holds a 25.5 per cent indirect stake in Britannia through a holding company Associated Biscuits International Holdings (ABIH)] to register Britannia’s trademark Tiger biscuits in over 70 countries.
The case is indicative of more than IP though as it’s an important point of disagreement between the Wadia and the Danone group both of which have a stake in ABIH.

The two are in talks to hammer out their differences but there is also an arbitration case between the two pending at the Bombay High Court. If talks fail, arbitration could take place in London where ABIH is officially registered.

The repercussion of this could be that Danone is forced to exit the biscuit market in India and make a solo entry eventually.

You can find the whole story here.

SpicyIP Posts and Subscribers: Some Interesting Statistics

I just found out that we've completed about 350 posts now--since the first post in October 2005, when the sprawling corn fields of Illinois, Champaign forced me to keep boredom at bay by taking to blogging...

Incidentally, we've also acquired an email subscription base of about 350 subscribers---perhaps one extra subscriber for each post that we put out!! If you know of any friends/colleagues interested in subscribing, please refer them to this post, which explains how to subscribe. It also explains how you can reduce the number of emails in your inbox by changing your preference to the "digest" mode.

SpicyIP wishes to thank it's readers for their loyalty and continuing participation. And most importantly, for joining us in our struggle to increase transparency in IP institutions/policy India by promoting the timely and accurate reporting/analysis of IP and innovation news from India.

Roche vs CIPLA: The Final Day...

Apologies for the delay in bringing you the latest on this dispute (the court hearing on the 31st of Jan), as I’d been travelling. But thanks to Taapsi Johri and Jay Thareja for sharing their excellent notes with me--it almost felt like I was sitting in court and watching Singhvi take a shot at rebutting Jaitley’s arguments. As many of you may have heard, the court reserved judgment and it is likely that we will see a ruling on this in about a week’s time.

Some of you have been following this thread. For others that came in late, please see here
(scroll down to read all our earlier posts on this theme).

The Law on Temporary Injunctions

Singhvi began by stressing on the three factor test for determining when a temporary injunction (restraining order) against a defendant should issue:

i) A prima facie case
ii) The balance of convenience ought to be in favor of the plaintiff
iii) But for the injunction, the plaintiff would suffer irreparable loss

Singhvi stressed that all the above factors were clearly in favour of the plaintiff i.e his client, Roche. Our previous post had noted the law on temporary injunctions with respect to patent matters. In particular, we stated:

"The case law on the grant of temporary injunctions in patent matters is very interesting. There are more than 10 cases that seem to suggest that the moment a defendant counterclaims invalidity, the court cannot grant a temporary injunction. Particularly, when the patent is a recently granted one.

Illustratively, see Manicka Thevar v Star Plough Works AIR 1965 Madras 327. See also the Bilcare case which has been extensively discussed on this blog. Interestingly, even in the Novartis EMR case (Norvatis AG and Anr. v. Mehar Pharma and Anr. 2005 PTC 160, para 28), since the defendants challenged the validity of the recent EMR grant to Novartis, the court held in favour of the Defendants and did not grant an injunction. The Court held that the balance of convenience lay in the defendants favour, as the drug was a life saving one and the plaintiffs did not manufacture the drug in India, but imported it.

Reading the cases, the non grant of a temporary injunction seems an almost automatic rule. Which essentially means that in India, one can never get a temporary injunction in a patent matter!! (since in almost all such matters, the defendants would always counterclaim invalidity)."

Interestingly, I was privy to a presentation on the UK law of injunctions at the 4th EGA (European Generics Association) forum in Brussels recently, where I’d gone to speak on Indian patent law. It then occurred to me that the above position taken by Indian courts was what prevailed in the UK about 20 years back. The UK changed it’s position since then. An invalidity attack cannot be used to prevent the issuing of an injunction in the UK today. In fact, in most such cases, an injunction is granted and the validity is decided only at trial. Illustratively, see SKB vs Generics (UK) Ltd, 2001.

It's troubling that our judges continue to be enamoured by antiquated case law from other jurisdictions. As we pointed out in our recent article in the context of the Madras High Court Ruling in the Novartis case: "The court reveals a fascination for citing foreign case law, even when some of these judgments issued more than a century back and are at loggerheads with what the Supremes have ruled in this country."

Section 3(d)

On 3(d), Singhvi stressed exactly what our previous posts have been stressing all along:

i) That Erlotinib is not a derivative of Gefatinib. (for a detailed analysis of the structures etc, visit Varun Chhonkar's blog here).

ii) Even assuming it is a derivative, it crosses the section 3(d) hurdle, as it demonstrates increased “efficacy”.

Let’s take point (i) first. Section 3(d) states that any "derivative" of a known pharma substance has to demonstrate increased efficacy in order to be patentable. If Erlotinib is not a derivative of Gefatinib at all, then section 3(d) does not apply. Apparently, this point was argued in Natco’s pre-grant opposition proceeding as well and the patent office found that Erlotinib is not a "derivative". Unfortunately, owing to the lack of a robust patent database in India, we don’t have access to any of NATCO’s arguments and the final decision by the patent office. In Bilcare, we recently saw that the court and the patent office reached diametrically opposite conclusions on the merits of a patent--will we see the same trend here?

As regards the second point on "efficacy", I’m not entirely sure whether Singhvi argued that Erlotinib was more efficacious for the same indication (lung cancer) or that that it could be used for a different indication altogether (pancreatic cancer). See our previous post here in this regard, where we stated that if the alleged indication is an altogether new one, then, even assuming that Erlotinib is considered to be a derivative of Gefatinib, Roche crosses the section 3(d) hurdle. It is helpful to lay out the structure of section 3(d) again:

"the mere discovery of a new form of a known substance which does not result in increased 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 process results in a new product or employs at least one new reactant. Explanation: For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significan