SpicyIP Tidbit: The 'Public Interest' factor in Brazil's patenting system

IMAK's Tahir Amin has written an incisive piece on the hurdles being faced by Gilead in its quest to patent Tenofovir in Brazil and the possible spin-offs for Indian companies in the process.

What caught our eye however was the 'public interest' factor which Mr. Amin mentioned in his post. According to Mr. Amin when a patent is being granted in Brazil, apart from the conventional patent office approval, the invention if it is a pharmaceutical product will also be subject to prior approval from the Brazilian Health Ministry and the Regulatory Body ANVISA. The latter regulator determines the question of patentability by determining whether the grant of patent is in the 'public interest'. I reproduce an excerpt from Mr. Amin's post below:

However, even if the patent is granted by INPI, according to procedure as we understand it, the final decision for the granting of pharmaceutical patents rests with the regulatory body Agencia Nacional de Vigilancia Sanitaria (ANVISA). The controversial role of ANVISA in deciding on pharmaceutical patents was incoporated into Law No. 9279/96 under Article 229 - C and it is understood that the body has hired thirty or more personnel to specifically analyse patent applications. So even if Gilead succeeds in overcoming INPI's objections, it may face a tougher task overcoming ANVISA, given its role in public health matters and the declaration that TDF be in the public interest.

Readers must obviously be reminded of the Justice Bhat's use of the 'public-interest' factor in the the Roche-Cipla litigation to deny an injunction. 'Public interest' therefore is a pivotal factor in any patent litigation involving life saving pharmaceutical inventions.

Also interesting, is the creeping role of drug regulators, into the patenting system. The day may not be far when even India moves in this direction especially given the fact that Section 3(d) requires that the patentee prove an 'increase in efficacy' and 'efficacy' is clearly more of a drug regulatory subject than a subject of patent law. Hopefully we'll carry a more detailed post on this later (or instead hope that Mr. Tahir Amin does so!)

Roche vs CIPLA: UK Rejects Tarceva as Too Expensive!!

Jason Douglas of Dow Jones reports that:

" The U.K's National Institute for Health and Clinical Excellence said Thursday that Roche Holding AG's (RHHBY) drug Tarceva has been turned down as a treatment for non-small cell lung cancer because it's too expensive.

NICE said Tarceva could not be considered a cost-effective use of the U.K.'s state-run National Health Service's resources compared to Sanofi-Aventis's (SNY) Taxotere.

NICE, which determines whether drugs should be available on the NHS in England and Wales on the basis of their effectiveness and value for money, said the cost of Tarceva was considerably higher than acceptable. It found Tarceva was GBP 2,100 more expensive to buy per patient than Taxotere and said it was not persuaded that Roche had proved its drug, known generically as erlotinib, had an equivalent survival benefit to Taxotere, or docetaxel.

Professor Peter Littlejohns, Clinical and Public Health Director, said NICE has yet to make a final decision on Tarceva and won't issue final guidance to the NHS until June.

Tarceva is licensed in Europe for the treatment of patients with advanced or metastatic non-small cell lung cancer, for whom other drugs have failed."

So let's get this straight. It's not just a "crazy" patent busting country like India that has issues with the price of Tarceva--it turns out that a richer and more patent friendly nation like the UK has a problem as well! And we might add that the UK boasts of a nationwide health insurance scheme. For our previous posts on the Roche vs CIPLA patent litigation in India, please see here.

I am now trying to investigate the price of Tarceva in the US and UK, so that we can compare with the price in India. If anyone has data on this or pointers in this, please write to me at . If you permit me, I will also share this information with all our readers on the blog.

Thus far, I have found only one cancercommunity group and a NY Times article that seems to suggest that the price of Tarceva in the US is the same (or even slightly higher) than the price in India! I reproduce the message below:

"How are all of you affording the cost of Tarceva?
My mother was just prescribed Tarceva. She is 89 years old and on a limited income. After the insurance pays 1/3 the cost of Tarceva, she will have to pay $2,400.00 out of pocket for a 30 day supply. She can't afford this."

From the above message, it is clear that the total monthly cost of this drug in the US is USD 3600 (or 1.44 lakhs Indian Rupees). Justice Bhat in his judgment found that the monthly cost in India was Rs 1.4 lakhs. In other words, the cost of the drug in India may be slightly more expensive than in the US!

Of course, what is quoted here is a 2006 price--which may have changed since then. However, it is unlikely that the change would have been significant.

It is notewothy that a NY times article pegs the price of Tarceva in the US at 2700 a month. Which means that the price is higher in India (USD 3600) than it is in the US!

See also this Forbes article in 2004, and this BBC article in 2006 which lamented the increasingly high costs of cancer drugs, including Tarceva.

Interestingly, the cancercommunity group that I mentioned earlier has a message from someone in India:

"hello, my mom was diagnoised with lung cancer 6 months back. She has finished 5 cycles of chemo treatment consisting of Carboplatin/gemcite. We are unable to give further chemo treatments becasue of her low blood counts. Under this conditions, i am exloring the usage of Terceva for her. But it seems to be very costly. We are uanable to afford for such high cost for treatment. Moreover in India , we dont have insurance which cover diseases like this .

I would be glad if you could guide me , as to how to procure Terceva from some cherity or any type of NGO or any type of social instituation . Hoping to hear from you.

Rajiv"

Recall our earlier post, where we attempted to debunk the use of terms such as "patent busting" to describe Justice Bhat's nuanced judgment. The above prices in the Western and more "developed" markets indicate that Justice Bhat was right to be concerned about the price and to build in this "public interest" factor into the injunction jurisprudence in India.

The question we ask our readers is this:

From a policy perspective, isn't it only fair that a country like India be given the freedom to derogate from a patentee's exclusive rights, when the patentee's price in India (a much poorer country with no universal health insurance coverage) is the same that it charges in the US? Particularly, when the validity of the patent is in issue?

On another note, why don't innovative pharmaceutical companies take more meaningful steps towards a differential pricing model? What stands in the way? Threat of parallel imports? The fear that lower prices in India would cause their own home consumers to begin demanding lower prices back home? See our previous posts on the parallel imports issue here and here.

India continues to be on US Priority Watch List

The Economic Times reports that India and 8 others have been placed on the “Priority Watch List” this year. India has been on this list for a number of years and its continued inclusion does not come as a surprise.

Readers will recall that Jayant (Spicy IP) had covered India and Thailand’s inclusion on the Priority Watch List in a detailed post last year, and had pointed out that “A country wise analysis of countries in United States Trade Representative (USTR) Section 301 Annual Reports (2004-2006) shows that most of the countries do not bother about their inclusion in the report. Except few, most of the countries of Special 301 report, since 2004 have not amended their laws to bring them in conformity with the interests of United States.”

While it continues to be unclear as to how being on this list affects India in any substantial way, the Economic Times report states that “Putting the countries in this list means that the US will subject them to extra scrutiny and if it decides to pursue complaints before the World Trade Organization then economic sanctions could be imposed on these countries”. Quoting the USTR, the report also states that "Priority Watch List countries will be the subject of particularly intense engagement through bilateral discussion during the coming year."

Being dragged into the WTO or forced into a TRIPs+ bilateral agreement might be a more substantial threat to India than the inclusion in the Priority Watch List. The WTO dispute resolution mechanism has, in the past, compelled India to amend its IP laws [See the India EMR case for example]. In the light of the recent discussions pertaining to the TRIPs compatibility of Section 107A(b) (here and here), it might indeed be interesting to see the grounds on which the US might choose to file a case before the DSB.

However, as per the ET article, piracy (along with the commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products) and not Section 107A(b) seems to be the key concern of the USTR at present. Spicy IP has covered the issue of piracy in a number of posts. We've also thrashed out the issues in considerable detail suggesting that policies such as price discrimination and price reduction might be a better way of curbing piracy (As has been done by Moser Baer in India: See our post here).



While there is no mention of such measures in the report, what I found most interesting is the IIPA’s suggestion that India "adopt a law that would require the licensing of optical disc factories". Do they mean a license from all companies that store any type of copyrighted data on optical discs or do they mean a specialized license from the government? I do hope its not the former because if it is, I cant imagine how complicated/expensive it would be to set up or continue running an optical disc factory! Either way, I also do not understand how licensing of factories would prevent small time private pirates from copying movies or music into legitimately produced, sold/bought blank discs. Any clarifications in this regard from readers who are more familiar with the way the industry works, would be greatly appreciated.


For those interested, we reproduce ET's report here:

WASHINGTON: The United States has placed India, and eight other countries, on its 'Priority Watch List' for this year for failing to protect the copyrights, patents, and trademarks of American producers from piracy.

"The United States continues to urge India to improve its IPR regime by providing stronger protection for patents, copyrights and trademarks, as well as protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products," the Office of the US Trade Representative (USTR) said in its Special 301 Report.

The Special 301 Report is prepared by the USTR on adequacy and effectiveness of Intellectual Property Rights by trading partners of the United States.

Apart from India, China and Russia, Argentina, Chile, Israel, Pakistan, Thailand and Venezuela have been placed in the list.

Putting the countries in this list means that the US will subject them to extra scrutiny and if it decides to pursue complaints before the World Trade Organisations then economic sanctions could be imposed on these countries.

"The United States encourages India to implement the WIPO Internet Treaties by strengthening its copyright laws, and to improve its IPR enforcement system by enacting and implementing an effective optical disc licensing scheme to combat optical disc piracy. Piracy remains a serious problem in India, as does trademark counterfeiting, including of pharmaceuticals and distilled spirits," the section on India of the report said. MORE PTI SK

The USTR office, headed by Ambassador Susan Schwab, emphasised on the need for improvement on the areas of police action against the pirates and counterfeiters.

It also stressed for expeditious judicial dispositions for copyright and trademark infringement with imposition of deterrent-level sentences for IPR infringers, and stronger border enforcement against counterfeit and pirated goods.

"The US urges India to strengthen its IPR regime and stands ready to work with it on these issues during the coming year through the Trade Policy Forum and other bilateral mechanisms," it added.

Forty-six countries have been placed on this year's Priority Watch List, Watch List.

"Priority Watch List countries will be the subject of particularly intense engagement through bilateral discussion during the coming year," the USTR added.

President of the International Intellectual Property Alliance (IIPA), a coalition of seven trade associations representing some 1900 companies, Eric Smith said "the Copyrights Industry Companies' principal concerns in India are threefold. The first of which being the inadequacy in effective criminal enforcements which are necessary to deter piracy."

"The second is legislative issues such as amendments to the Indian copyright law to implement the WIPO Internet Treaties signed in 1996," he said, adding a legislation is pending for over ten years to implement those treaties.

"Thirdly, the IIPA and others have urged India to adopt a law that would require the licensing of optical disc factories. This would help in ensuing that these factories do not produce pirated products," Smith said.

According to IIPA statistics, the total loss in 2007 for American Copyrights was around $914 million against $752 million in 2006. The estimated losses for US Copyrights from India in business software area was $732 million in 2007; records and music at $14 million; entertainment at $130 million and books at $30 million.

SpicyIP Tidbit: Minister to ensure that reduced excise duty to reflect in drug prices

The Minister of Chemicals and Fertilisers Ram Vilas Paswan, who heads the pharmaceutical advisory forum has instructed drug companies that they will have to reduce their prices by atleast 4.58% since the excise duty on drugs has been scaled back from 16% to 8%.

He also promised to strengthen the infrastructure of the pricing watch-dog - the National Pharmaceutical Pricing Authority (NPPA) - by introducing a 24 hour helpline for customers who want to complain about drug companies over-charging on certain products. (For our previous posts on the NPPA please click here)

Additionally he also requested State Governments to ensure that doctors from government hospitals prescribed only generic medicines. To this end one generic drug store would be started in every district and these stores would be supplied by the public sector pharma companies.

The Minister must be complimented on his efforts to ensure more affordable medicines for the public. It’s a pleasure to see a well-rounded effort to tackle the price problem from all angles. The usual approach has been to indulge in some ‘patent rhetoric’ after which the matter is swept under the carpet. The Minister's approach is indicative of the fact, that the complex problems regarding access to affordable medicines in this country cannot be pinned to any single issue such as patents.

SpicyIP Tidbits: Indian Drug Regulatory System Forced to Swallow the Bitter Pill by WHO

The Indian drug regulatory system is at the receiving end of a withering scorn from the WHO which lambasted the Indian authorities for the lackadaisical approach which pervades the drug approval mechanism. Coming from the WHO, these scathing remarks are extremely damaging for a nation which boasts of being home to the world’s fourth largest pharmaceutical market by volume and thirteenth by value and probably point to the need for some honest soul searching.

What is even more dangerous is the observation by WHO that the “Indian drug regulatory authority is not independent and is functioning under pressure”. According to PharmBiz:

“The WHO has also taken strong objections to the new drug approval mechanism existing in the country. The WHO team expressed surprise over the way new drugs are approved in the country without proper documentation on pre-clinical, clinical and toxicological studies. The WHO national regulatory appraisal team, which held a series of marathon meetings with the health ministry officials, raised thousands of questions on several issues concerning the quality of medicines and drug regulatory system in the country, sources said.”

Further, it appears that the Indian health ministry was hauled up earlier this year by the WHO. PharmaBiz reports:

“Earlier this year, the WHO had asked the health ministry to either suspend the licenses of four government-owned vaccine manufacturers, Haffkine Biopharmaceuticals in Mumbai, BCG Vaccine Laboratory in Chennai, Pasteur Institute of India (PII) in Coonoor in Tamil Nadu and the Central Research Institute (CRI) at Kasauli in Himachal Pradesh or upgrade the quality of these institutes. The government had already closed down the latter three institutes.”

PharmaBiz added that WHO has asked the Indian health ministry officials to undergo training in an advanced country to understand how the regulatory system works in those developed countries. Under the WHO direction, an Indian health ministry team, including Drug Controller General of India (DCGI) Dr Surinder Singh and joint secretary in the health ministry Devashish Panda, is leaving for Canada on April 26 for a week-long training. The Indian health ministry officials will study the regulatory system in Canada, especially the new drug review procedure, and how it can be adopted in Indian scenario.

The malady is deep rooted with an urgent need for long-term measures and an absolute contempt for myopic solutions. This is evident from an article in ExpressPharmaOnline in 2002 where it was reported as follows:

‘‘Applications submitted to the DCG(I) for permission for clinical trials in respect of new drug applications (NDA) and abbreviated new drug applications (ANDA) are often referred to outside agencies like the Indian Council of Medical Research (ICMR) and the Department of Biotechnology, Government of India (DBT) for review. This arrangement often leaves very little control with regard to the time runs.’’

The reason for this “outsourcing” is again given by PharmaBiz which cites the case of State Drug Regulatory Authorities:

“In most of the states, they are under staffed and no established systems are present. They are technical and professional (Pharmacy) in nature. We cannot expect technical expertise with policing from one person. There are three aspects to be observed by State DRA: 1. Regulate the manufacture of the drugs in their area to meet the specifications and guidelines laid down by the Drugs and Cosmetics Act, 1940 and Rules 1945 2. Regulate the Inter and Intra state Commerce in Drugs 3.Prevention, Control and take steps to punish the offenders. In case of first aspect, most of the states are very week and a few states are implementing, as they like. Some times, they are overlapping in to the authority of DCGI in permitting new drugs. There are hardly any regulations or control over the mistakes or offences committed by the State DRA Officers who permit even manufacture banned or new drugs. Except Maharastra and Gujarat, all other state DRA's are not strong in respect of finance or mechanisms or facilities provided by the State Governments. The budget allocated to DRA in any state is not even 0.4% of their health budget. In this, nearly 86% is going to the staff salaries and only 10% is going to be spent for actual work. States are not showing much interest in implementation of this Act and Rules as it is a Central Act. Any happenings are threatening to the existence of their continuity (political) then only they are showing concern for implementation of this act. In many States, Local political personal are trying to interfere in the implementation of this Act and rules. Local persons are influencing the DRA officers and the bad activities in this field are posing threat to the nation's health in the form of spurious / adulterated etc. drugs. In view of this, some of the category of drugs manufacturing licenses is getting approved by CLAA.”

Again budget and manpower seem to be the predictable reasons as is the case with other government agencies including the Patent Office. Hopefully, the powers that be in collaboration with the players come up with a mechanism on the lines of the USFDA or the one in the EU.

NKC Vice Chairman: Bayh Dole Bill was Shrouded in Secrecy

TV Padma of the Science and Development Network (Sci Dev) has this report on the proposed Indian Bayh Dole bill. As per her report, the bill was first recommended by the National Knowledge Commission (NKC). Pushpa Bhargava (who resigned as Vice Chairman from the NKC last year) is quoted as alleging that there was considerable secrecy around the bill and that "every attempt was made to circumvent an open discussion and debate over it.."

Given that Pushpa Bhargava had an open fall out with Dr Sam Pitroda (the Chairman of the NKC) last year, one is not entirely sure if Pushpa is correct in his assessment here or whether this is yet another instance of him taking a shot at Dr Pitroda for personal reasons. I reproduce Padma's report below:

"The Indian government is to discuss a draft bill allowing government-sponsored researchers to patent and commercialise their work — but the legislation is generating heated debate amongst scientists.

The draft legislation is to be introduced for debate in the Indian parliament in the next two months.

It is spearheaded by the Ministry of Science and Technology and modelled on the United States' 1980 Bayh-Dole Act, which gave US universities and research institutes intellectual property rights over public-funded research.

The bill states that public-funded research in India has often produced innovations that hold potential for public good, but these have "languished in laboratories" instead of being released commercially.

This is blamed on the retention of intellectual property rights by the funding body, a lack of incentives for academic institutes to commercialise research and the absence of appropriate legal framework to accomplish this.

The new legislation seeks to rectify this by placing the potential for commercial gains in the hands of the researchers.

Officials from India's Department of Biotechnology, which helped draft the bill, say it will promote innovation in Indian universities and research institutes by generating funds through patents.

The bill represents "much-needed change," according to Somenath Ghosh, managing director of India's National Research Development Corporation, which helps organisations and individuals commercialise their inventions.

Ghosh told SciDev.Net that most Indian universities have little awareness of the need to protect and commercialise knowledge. "There was no mechanism or incentive to protect knowledge and their research networks have limited interaction with industry."

But critics are concerned at the speed with which the bill has been processed and the secrecy surrounding it.

The bill was recommended by India's National Knowledge Commission, a government advisory body.

But Pushpa Bhargava, who resigned as vice-chairman of the commission last year, says there was no major open discussion at the commission and he was "taken aback" by the recommendation.

"Every attempt was made to circumvent an open discussion and debate over it," Bhargava told SciDev.Net.

Dinesh Abrol, a scientist at the National Institute for Science, Technology and Development Studies in Delhi, says that university research in India and the United States are vastly different.

In the United States, Abrol says, state agencies play a major role in supporting research involving several institutes and universities, which all receive large grants. But in India, most state universities are poorly funded and left out of major national research projects."

SpicyIP Tidbits: Mint Story on Patent Loophole in India

CH Unni writes a front page story in the Mint on section 107A(b) and the possibility that this ambiguous provision could be strategically exploited by Indian generic companies to import drugs from Bangladesh to India. Readers will recollect that SpicyIP ran a couple of posts on this topic. See here and here.

In fact, this post here generated the most number of comments (about 25 comments so far) that the blog has seen so far!! For those interested in the intricacies of this section, please read through the comments carefully. SpicyIP is terribly pleased that this article dealing with "patents" made it to the front page of the Mint, demonstrating the importance of "patents" and their impact. Bodes well for our campaign to enhance awareness around IP issues and to promote more dialogue and transparency.

Back to Unni's piece, which we reproduce in its entirety below:


COMPANIES RUSH TO EXPLOIT PATENT LAW

Local firms can import generics made in least developed countries without authorization of the patent holder

By C.H. Unnikrishnan

Mumbai: Indian pharma companies have discovered a loophole in the country’s patent laws that could allow them to sell copycat versions of patented drugs here and are quietly firming up plans for this, although some experts are of the view that this approach violates World Trade Organization, or WTO, norms and even one Indian patent law.

The loophole is actually a provision—Section 107A(b) of the Indian patent law amended in 2005—that allows local companies to import copycat or generic drugs manufactured in least developed countries such as Bangladesh, Nepal and several African nations, without the authorization of the patent holder.

LEAKY PROTECTION?

This means companies here can import drugs from a country where pharma patents are not in effect if the local law in that country authorizes the manufacture of those medicines. In the earlier version of the law, an authorization by the patent holder was a compulsory requirement.

Indian drug makers have rushed to take advantage of this, and several of them have even started working on building manufacturing plants in these countries. The new provision may not be in complete compliance with the international trade rules of WTO. However, a smart judiciary interpretation could make it possible for generic drug companies such as Cipla Ltd, Ranbaxy, Sun Pharmaceutical Industries Ltd, Dr Reddy’s Laboratories Ltd and Natco Pharma Ltd to set up manufacturing facilities in least developed countries, according to patent law experts.

“A literal reading of Section 107A(b) would seem to suggest that Cipla or Ranbaxy, for instance, could set up shop in a country with no pharma patents such as Bangladesh and then export (say) Roche’s (F Hoffman La Roche Ltd) patented drugs to India,” said Shamnad Basheer, an international patent law expert and a research associate at Oxford IP Research Centre.

“Section 107A(b) earlier insisted that a company could import such drugs only if it purchased them from a person ‘who was duly authorised by the patentee’ to sell those drugs in Bangladesh,” he said. According to Basheer, the provision was amended in 2005 to say that it was not necessary for the exporter in Bangladesh to be authorized by the patentee. As a result, if the exporter is authorized by the law in Bangladesh to produce and sell the product, a drug maker such as Cipla can import that product legally under Section 107A(b).

Thus, Cipla’s recent decision to set up joint venture companies in African countries such as Uganda and Morocco with local partners will help the company do this. And Mumbai-based Sun Pharma, which has a manufacturing plant in Bangladesh, can explore this option. Ranbaxy Laboratories Ltd, the country’s largest drug maker, already has manufacturing facilities in least developed countries including in Africa.

Still, Indian drug makers are being discreet about their plans.

“Our plans are not yet ready in this regard as issues such as (laws on) importation of drugs from a least developed country and exporting patented drugs to countries where pharma patents are not applicable are still not clear,” said Cipla chairman and managing director Y.K. Hamied.

A spokesperson for Sun Pharma said: “We are still studying the relevant section and would take some time to interpret it.” According to Basheer, the only hurdle is with the interpretation of certain sections of the law as companies that choose to import patented drugs from least developed countries might run a serious risk of violating the exclusive right to import guaranteed under Trade Related Aspects of Intellectual Property Rights, or TRIPS.

It remains to be seen if approached, whether an Indian court will interpret Section 107A(b) in accordance with what it believes to be the correct TRIPS interpretation, he said.
“The import restriction notified in the country’s customs regulations for patented products also matters a lot to conclude whether such imports will be easy,” said Gopakumar Nair, a Mumbai-based patent consultant.

There is also a direct threat from patent holders, who could persuade their respective home governments to drag India to WTO for violating TRIPS agreement, because it is still not clear if the provision (Section 107A(b)) is in compliance with it, according to another patent law expert who did not wish to be identified. An email query sent to the president of the Organisation of Pharmaceutical Producers of India, or OPPI, the industry body representing multinational drug makers present in India, remained unanswered as he was travelling.

According to a recent post in an international patent blog SpicyIP, selling copycat drugs in India manufactured in least developed countries violates TRIPS norms as there is no first sale of the patented drug by the patentee as required in TRIPS.

“In short, the very essence of an exclusive right to ‘import’ mandated under Article 28 of TRIPS is affected. Consequently, the parallel import provision in India—Section 107A(b) —will be seen to violate Article 28 of TRIPS,” the blog says.

A senior lawyer from New Delhi who specializes in intellectual property, points to another rule in the Indian Patent Act that protects the right of the patent holder. “Section 48 of the Indian Patent Act requires that a patentee’s exclusive right to ‘import’ be protected. Section 107A(b) hits at the very essence of this right,” he said.

Taking this into account, an Indian judge could render the amendment to Section 107A redundant, and revert to the earlier provision, which said it is not an infringement to import a patented product only if the import was from an exporter ‘duly authorised by the patentee’, the lawyer, who did not wish to be identified, added."

SpicyIP Tidbit: The Railways patent!

In a major development that will open new vistas for the Konkan Railway, the Anti-Collision Device (ACD) developed by Konkan Railway, has been granted a patent in China, Russia and Singapore, opening up possibilities of export of the technology in future. It was first successfully tested by the Konkan Railway on the North East Frontier Railway covering a route of 1,924 km. Konkan Railway had applied for patents across the world in several countries and this grant follows the patent already awarded in India and South Africa.

The indigenous design for the ACD by Konkan Railway, contains a microprocessor that when installed in locomotives, guard vans and stations- acts on its own to successfully prevent train collisions in mid-sections, station areas and at level crossings- helping to drastically improve safety.

After this success, the Railways wish to implement this wonderful new technology in other sectors such as the Central Railway, South Western Railway, and Southern Railway.
Read the Government Press release here.

World IP Day: From "Faith" Based IP to "Fact" Based IP

As many of our readers know, today is the World Intellectual Property Day, a day that was first marked 8 years ago by WIPO as an occasion to commemorate and celebrate "not only the enormous power of human creativity, but also the intellectual property rights that help to fuel and channel it, making it such an important driving force for economic, cultural and social development."

SpicyIP wishes to celebrate this special day with all its readers, who have done so much to participate in our mission to debate IP events/cases/policy in a dispassionate and objective manner (at least as best as we can).

Comments (both public and personal) have really helped enhance our understanding and appreciation for the complex IP issues that continue to challenge India. And contributed in no small way to our desire to increase the level of transparency in intellectual property debates in India.

To commemorate this special day, SpicyIP wishes once again to reiterate its call to the government of India and the various IP stakeholders in India (including the public at large) to move away from a rhetorical and "faith" based IP model to a "fact" based IP model.

We had already touched on this theme in some of our posts, most noteably the Bayh Dole post, where the government mission to blindly transplant the Bayh Dole Act from the US seemed more a "faith" based mission than a "fact" based one. There were no studies conducted to determine the current nature of university research, university IP policies, university-industry interactions etc.

Let me stress again that we are not opposed to the noble intent underlying this bill i.e. to help move technology and research from the university to the market. However, the complete lack of transparency with which this is being pushed forward in what is supposedly the world's "largest democracy" is shocking, to say the least.

Once again, on this "World IP" day, we appeal to the government to open this bill up for healthy public discussion and debate. And to make available a copy of this bill for public comments at the earliest.

In order to commemorate the World IP Day, OPPI, along with Nasscom, organised an IP event in New Delhi yesterday, where I spoke.

This workshop saw some wonderful presentations from some very big names in the field. Ranga Iyer (President, OPPI and Managing Director, Wyeth) and Tapan Ray (Director General, OPPI) set the tone for the papers to follow by stressing on the importance of incremental innovations. Ranga effectively demonstrated how we cannot rubbish all incremental inventions as mere "evergreened" products and cited real world examples of incremental inventions that provide tremendous value to society.

Naresh Nandan Prasad, Joint Secretary, Department of Industrial Policy and Promotion (clearly one of the most well read and sophisticated government officials on intellectual property) stressed that one cannot assess the success or failure of the new Indian patent regime--as it is too soon to tell. The regime changed to grant pharma product patents only in 2005, and the first spate of patents are just beginning to be granted and litigated. We ought to therefore give it some time before being generous with our doling out of bouquets and brickbats.

DG Shah, Secretary General, IPA (Indian Pharma Alliance) had some very impressive slides on "facts", figures and numbers on drug patents, sales, pricing etc. He stressed that the most patent friendly nation in the world, the United States is now re-calibrating its approach to ever increasing IP protection. He noted that a book by Adam Jaffe and Josh Lerner titled "Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress" was in some way responsible for this new thinking in the US.

I brought to his attention a more recent book on this theme, by James Bessen and Michael Meurer titled "Patent Failure", that is more well researched in terms of the numbers and data. For those interested in a preview version of their book and its key conclusions, see this post in the world renowned "Patently O" blog. Whether or not we agree with their figures and conclusions, SpicyIP welcomes the introduction of more numbers, figures and facts into this debate. Certainly a better footing upon which to frame policy than to rely on blind "faith" or "common sense".

Swati Piramal, Director, Nicholas Piramal, and one of the most creative users of multimedia, showed a video of an interview in 2005, where Yusuf Hamied of CIPLA emphatically stressed to Karan Thapar of CNBC that the Indian patent regime would result in a "genocide" within the next couple of years!! She ended her presentation by asking whether India had seen any "genocide" as predicted. I am trying to get my hands on this video and will post it soon.

Prabuddha Ganguly (of Vision IPR), a noted patent expert from India spoke of the various knotty issues in our patent regime. He argued persuasively that we need to iron out some of the drafting creased in India's new patent regime in order to make it work more smoothly.

Speakers from abroad, including Jon Santamauro (counsel, Sidley Austin) and Heinz Hamann (BI, Germany) spoke on data exclusivity. The drug controller, Dr Surinder Singh, spoke on the challenges facing the drug regulatory machinery in India.

The last session had Dr Stephen Smith (of Nupharm), a patent expert from the UK, and me speaking on "challenges and dilemmas on IPR". Steve had a very interesting presentation that pointed to some of the most thorny interpretative issues in the current Indian patent regime. I've interacted with Steve in the past and know him as one of the most moderate faces from industry. Importantly, Steve is also a big fan of "evidence" or "fact" based IP research.

During the course of my presentation, I stressed upon the fact that we ought to move away from a "faith" based IP model to a "fact" based one. To illustrate my point further, I used two of the most controversial patent cases in India today, the Novartis (Glivec litigation) and the Roche vs CIPLA litigation. While the Novartis case saw headlines from one camp that could best be characterised as shrill rhetoric, ranging from "patents would kill" to "we will defy patents to save lives", the Roche case saw similar emotional rhetoric from the other camp that ev0ked misleading terms such as "patent busting" and "patent theft" to describe the judgment.

I argued that in a "fact" driven world, we have to appreciate that the Novartis case involves a very technical patent question: is the new polymorph patentable or not? If it is patentable under our current patentability standards, then we must grant it a patent, irrespective of how the patent is likely to be used. At the stage of granting a patent, there is likely to be no product at hand, and one is not certain whether not the grant is likely to result in a proper use or an abuse of the patent in question.

Much like a knife which could either be used for cutting an apple or for killing someone, a patent could be either put to good use or bad. If perchance a patent right is "abused", such as the patentee charging excessively high prices, there are safeguards in our legal regime to guard against this, such as compulsory licensing, price controls etc. But to deny the grant of a patent to an invention worthy of protection on the ground that it is likely to misused is flawed policy--on that count, the argument could be reduced ad absurdum to suggest that India ought not to grant patents to any invention at all--in much the same way as arguing that the sale of knives should be banned altogether!!

SpicyIP had earlier reported on a news item, which stated that the Drug Action Forum in Karnataka was calling for a boycott of Novartis, unless they withdrew their case!! SpicyIP responded to this call for boycott by noting that:

"Shouldn’t the case be permitted to run its course? What credibility would we have left as a country if we introduce terms such as “efficacy”, not known to any other patent regime, and then expect interested stakeholders to desist from taking up the issue before courts in the hope of gaining some clarity on how such terms are to be interpreted?"

In other words, the Glivec case involves a very technical patentability issue, centering around section 3(d)--a statutory provision that is new to India and the world. How can we expect a patent applicant to refrain from challenging what is essentially a non speaking patent office order that does not bother to spell out as to how Novartis fails the test under section 3.d?

Similarly, in the Roche case, the assumption that patents are sacrosanct property rights that cannot be derogated from, is completely misplaced. Readers will recollect an earlier post reproducing excerpts from an article in the Indian Express, where I concluded by suggesting:

"....one is not certain at this stage if the Roche patent over Tarceva is a valid one or not. Prior to a final decision on this count, deploying adjectives such as “patent busting” or “patent breaking” to describe the Delhi High Court order smacks of ignorance. If at all anything has been “busted”, it is the notion that patents are sacrosanct monopolies that cannot be derogated from. Most patent scholars today readily agree that patents are nothing more than a statutorily granted right by the state in exchange for the useful disclosure of scientific information. As with other statutory rights, they can be derogated from, when “public interest” so demands. Sophisticated patent policy requires a careful balancing of innovation imperatives through patents against other competing and perhaps more important interests, such as the right to health. And it is this delicate balance that Justice Bhat strives for and achieves in his judgment — a judgment that will no doubt go down in the annals of history as representing a milestone in Indian patent jurisprudence."

To conclude this note, the main purpose of which is to commemorate the World IP day, SpicyIP wishes to reiterate its call to move away from rhetoric and demand more "facts" and numbers. Certainly a better way to build IP policy around than to rely on our innate sense of what is right or wrong. Or to rely on a much bandied about term: "common sense".

Some of the best literature on intellectual property challenged prevailing notions of "common sense". Interestingly, in a landmark decision (Harvard College v Commissioner of Patents (2002) SCC 76), which denied the grant of a patent to a genetically engineered mouse, the Canadian Supreme Court relied on common sense to draw the line between higher life form patents (such as mice) and lower life forms (bacteria, microbes etc). In other words, they fell back on "common sense" to justify their decision to ban patents on higher life forms such as the mouse, when previous Canadian decisions had affirmed the grant of patents to lower life forms such as bacteria etc.

In a telling couter, dissenting judge, Justice Binnie quipped: "With respect, there seems to be as many versions of “common sense” as there are commentators"!!

Similarly, in the context of pharmaceutical patent debates, we have to appreciate that MSF's notion of "common sense" is very different from that of Roche's. In order to make for more optimal policy making, we need to be fairly skeptical of both their claims on intellectual property and begin demanding more numbers and facts.

SpicyIP Tidbit: Appeals Court rules on two issues in the Roche-Cipla litigation

The Mint and the ET report that a division bench of the Delhi High Court, hearing Roche's appeal against the judgment of the single judge, have restained Cipla from exporting Erlocip to any country where Roche already has a patent for the drug. This is a mere restatement of the obvious and more over its a moot point as to whether the issue of export is even within the jurisdiction of the Delhi High Court. If Cipla does export to a country where Roche already has a patent for Tarceva then in that case it is within the jurisdiction of the courts of that country to initiate action against Cipla. However what seems to be obvious from the decision is that Cipla is free to export to a country which has not granted a patent for Tarceva for e.g. Nepal, Bangladesh. Cipla therefore is free to export to Nepal unlike Natco whose application for a compulsory license (for Tarceva) under S. 92(a) is still pending in the Patent Office.

An interesting question that arises from this ruling is whether Cipla can export to a country which has issued a compulsory license under the Doha Declaration?

Another issue on which the Division Bench has ruled is that only Cipla may manufacture a generic version of Tarceva and that no other generic manufacturer may use the judgment of the single judge as a precedent to enter the fray. This really doesn't make sense since other generic manufacturers are free to follow Cipla's strategy - that is manufacture the drug and wait to be sued by Roche. To the best of my knowledge there is nothing to stop other generics from not doing so.

The matter is posted for its next hearing on 12th of May.

SpicyIP Tidbit: Indian Filmmaker complains about American Piracy.

And in a patent heavy blog of late, seems like copyright infringement is making a comeback into the spotlight. And how! If you thought only the Indian enforcement systems were complained about, this news report may indicate a switcheroo! Recently, on April 22, 2008, the anti-piracy drive from India took its battle and made representations before the US Congress. This was done to mark World IP Day, in recognition of talented creators around the globe.

In a market, where Indian movies are the top-grossers in the foreign film category in the United States and where home videos alone make up to 15% of India's entertainment industry, veteran filmmaker Bobby Bedi at Capitol Hill lamented the loss of almost 90% ie. approximately 4 billion dollars worth of revenue through outlets like small retail stores. Bedi further commented that American enforcement agencies did not do enough to plug losses suffered by Indians in the entertainment industry in the United States when compared to their American counterparts.

This was supplemented by a recent study by the US Indian Business Council (conducted independently, the global accounting firm E&Y); The study was commissioned as part of a joint initiative by the council and the FICCI, as well as a combined drive by the Hollywood and Bollywood entertainment industries to promote "convergence".

Not surprisingly, several eminent speakers on the occasion stated that the focus must be on creating more inexpensive movies to help curtail the losses incurred- which brings us back to that oft-debated spicy point- Is the motive of all creativity largely profit driven?

Read the full report here. Read also a related report on rising piracy here.

Indian Intellectual Property: The Transitition from Saraswati to Lakshmi

Peter Ollier, Asia Editor of MIP (Managing Intellectual Property) has a brilliant story in the latest issue of the MIP on the Indian IP regime. For those of you familiar with the MIP, you will recollect that Peter has been one of the most sophisticated and well informed writers on the Indian IP scene. To access the article, click here. If you are a first time user, you can register for a free subscription and access the full version of this article.

What is interesting is that Peter begins his article by speaking about Lakshmi (the Indian goddess of Wealth) and Saraswati (the Indian goddess of Knowledge). Dr Mashelkar had, in the past, viewed Indian IP as a transition from Saraswati (knowledge) to Lakshmi (wealth). Peter picks on this framework and asks the interesting question: has the transition been a smooth or a bumpy one for India? He opines that it is a bumpy ride and begins his story by exploring the reasons for this:

"What is holding India back? The list is long and varies depending on who you talk to. Pharmaceutical companies insist that the country requires a simpler patent system, software companies want software patents, and everyone talks about the need for more IP awareness. More generally, observers of the problems India has in developing an IP system often talk about Lakshmi and Saraswati, Hindu goddesses of wealth and knowledge respectively. Some argue that the two cannot coexist peacefully in Indian mythology, which means knowledge should remain free, while others see the importance for India of linking the two together.

The analogy with Lakshmi and Saraswati is not new. In 1995, respected scientist RA Mashelkar first began talking about how India needs to become as good as the US in moving from Saraswati to Lakshmi – from knowledge to wealth. But the plight of Mashelkar exemplifies the problems inherent in making this argument in India. In April 2005, the Indian Ministry of Commerce appointed five IP academics, led by Mashelkar, to a committee to consider whether more changes should be made to the country’s newly-amended Patent Act to bring it into line with the TRIPs Agreement. But when, at the end of 2006, Mashelkar published the committee’s report the issue was swallowed up in a row about plagiarism that pitted those who support pharmaceutical patents in India against those who want to limit them. Mashelkar resigned from the committee and, although the government promised that the report would be rewritten, it was quietly dropped."

Importantly, Peter deals in substantial part with the Indian Bayh Dole bill and captures the sentiments of a number of stakeholders and commentators on this thorny issue. As readers know, SpicyIP has been lamenting the lack of transparency by the government in not encouraging a healthy debate on this bill till date. See our previous posts on this here and here.

Peter writes:

"Another IP-related bill, called the Public Funded R&D (Protection, Utilization and Regulation of Intellectual Property) Bill 2007, but more popularly known as India’s Bayh-Dole Act, has attracted more attention. This law would encourage publicly funded universities to patent and commercialize their research – a perfect example of linking Saraswati to Lakshmi. Despite increasing controversy over the secrecy with which the bill is being pushed through and doubts about the wisdom of following the US Bayh-Dole legislation too closely (see box), the government is firmly behind this bill and it is expected to pass through parliament this year. "

The "box" referred to in the note above contains the following information:

"Passing IP-related legislation in India is a complex and controversial process and the proposed Technology Transfer Act or Bayh Dole Act is no exception. Known as the Public Funded R&D (Protection, Utilization and Regulation of Intellectual Property) Bill, the draft law is still being developed with selected stakeholders and has not yet been made available for public consultation. Pravin Anand of Anand and Anand, who has seen the most recent draft, claims that “fundamental changes” have been made to the bill when compared to the Bayh-Dole Act in the US, in order to make the Act work in India.

The bill seeks to encourage public sector research organizations to patent their inventions and offer them to industry for commer-cialization on a revenue-sharing basis. Under the latest draft, the inventor receives 30% of revenue from the use of the patent while the institution gets 10% to reinvest in R&D. The institute must disclose an invention created using government money to the relevant government agency within 90 days. If it wishes to patent the invention it has a further 180 days to notify the government. If the university or research institution decides not to patent the invention, the government can then step in and do so.

Professor Ananda Chakrabarty, famous in the US pharmaceutical industry for the Supreme Court case Diamond vs Chakrabarty, which dealt with whether genetically modified micro-organisms can be patented, is in favour of the bill. As an academic who founded a company called CDG Therapeutics that holds the information for five patents granted during his research at the University of Illinois, he is an example of Bayh-Dole in action. But he told Managing IPthat the law will not lead to Indian universities creating Indian equivalents of leading life science companies Genentech or Biogen without a change in attitude in the aca- demic sector. “Industry and government are waking up to the spirit of innovation, but the academic sector is lagging far behind ... I don’t fault the scientists – I fault the system” he says.

Other responses so far have been mixed. Calab Gabriel, a partner at K&S Partners in Gurgaon, applauds the main aim of the bill, claiming it will “foster a lot of public private partnership between universities and private companies”. But he is worried that universities might shift their priorities from fundamental research that focuses on scientific principles and rarely leads directly to patentable inventions, to research that is more likely to result in patents.

Others are more critical: “There is a complete lack of clarity about what they [the government] are trying to achieve,” according to Dilip Shah, secretary-general of the Indian Pharmaceutical Alliance, which represents generic manufacturers. Shamnad Basheer, founder of the Spicy IP blog and a campaigner for greater openness over IP policy making is disappointed by the lack of transparency in the legislative process so far, and questions the wisdom of “blind legal transplants from one country to another”. He also believes more research needs to be done on the benefits of Bayh-Dole in the US, stating “some are of the view that Bayh-Dole may be impeding the progress of science and technology in the US”.

And more importantly, Peter covered the double patenting story (the Indian patent office granted the same patent to two different entities, HUL and Eureka Forbes) that SpicyIP had broken some time back. See here and here. And he even managed to get a comment from a government spokesperson on this story. SpicyIP is pleased with more news coverage of this story, which will go a long way towards improving transparency and accountability at the patent office. I extract the relevant portions from the article below:

"Given the high commercial stakes involved, IP offices worldwide attract widespread criticism when they make mistakes in granting patents. The USPTO was ridiculed for granting a patent for a crustless peanut butter and jelly sandwich in 1999, while in 2000 the EPO had to admit that it had granted a patent that could have allowed the cloning of human embryos (something
barred by European guidelines) as a result of an “oversight”. Now India’s four patent offices are coming under the same level of scrutiny. In one of the most embarrassing recent cases, the offices in Mumbai and Chennai have both grant- ed patents to two different companies for the same invention.

Both Hindustan Unilever and Eureka Forbes filed patent applications for a gravity-fed water purification system for drinking water. Hindustan Unilever (at that time Hindustan Lever) applied for a patent in June 2002 at the Mumbai patent office. The patent was published in May 2005 and was finally granted in 2006.

Meanwhile, Eureka Forbes filed at the Chennai patent office in March 2004, which published
the application in February 2005. Hindustan Unilever filed a pre-grant opposition in August of the same year, but the Chennai patent was granted in September 2005 with the opposition still unheard. Hindustan Unilever immediately filed a post-grant opposition. When Eureka Forbes failed to respond to the opposition within two months, the Chennai patent office granted the company an extension. Hindustan Unilever has filed a writ petition challenging this extension at the Madras High Court and a suit for patent infringement at the Delhi High Court. When Managing IPasked Naresh Prasad, joint secretary in the Department of Industrial Property and Promotion, about the incident he said:

“There is a possibility where we can have instances where two patents are granted for the same product and there is a lack of coordination ... I think there is a case to look at some restructuring, to ensure that appli- cations would be received in one office and then examined in different offices. Probably this is something we need to do that may eliminate the chances of any duplication.”

No proposals along these lines have yet been put forward. In another case that gained widespread attention in the Indian media, the Chennai patent office granted a patent for Roche’s anti viral medication valganciclovir (Valcyte) without hearing a pre-grant opposition filed by non-profit organization the Lawyers Collective. "

Peter ends by noting:

"Physical infrastructure also desperately needs improving, not just to help IP creation, but for economic development in general. Travelling round Gurgaon, an outsourcing hub near Delhi and supposedly a business-friendly city, underlines this point. Journeys from meetings with brilliant IP lawyers to appointments with outstanding research scientists are frustrat- ingly slow as the driver lurches from pothole to pothole, swerving to avoid cars designed in the 1950s, all the while try- ing in vain to navigate a grid system for addresses that appears utterly chaotic to both foreigners and locals alike.

India’s metaphorical journey from Saraswati to Lakshmi is proving as difficult as those real travels in Gurgaon. But it is slowly speeding up. Both the government and a growing sec- tion of the private sector are committed to developing a system that encourages the creation of IP and patent filings, a key indicator of innovation, should rise dramatically over the next few years. But there is still unfulfilled potential. The task of raising awareness has only just begun, and the government still needs to do more to strengthen infrastructure and create a system where the funding exists to allow innovation to flourish."

Peter deals with many more issues surrounding Indian IP in this very informative piece. And for those of you interested in a bird's eye view of the key challenges facing the Indian IP regime, I would recommend a serious read of his article. In Part II of this series, Peter intends to cover specific IP controversies/cases in India such as the Roche vs CIPLA case, the Natco Compulsory licensing cases etc. SpicyIP eagerly awaits this treat..

JK Rowling- Copyright hog?!

People across the globe are hugely fascinated with the immensely successful Harry Potter series by author JK Rowling. But after the release of the seventh and last book, Ms. Rowling has gone all out to stop any infringement on her work. Recently, Ms. Rowling along with Warner Bros. Entertainment is suing RDR Books, a small publisher in Michigan, to prevent the sale of an online 'A-to-Z guide' to the HP Series.

The case put forth by Ms. Rowling seems simple enough- the book "is not a reference book or scholarly critique", they claim, and it lacks "any originality or invention". The alleged 'infringer' though is being valiantly defended pro bono by Lawyers at Stanford University Law School's Fair Use Project, who seek to establish that this lexicon (more a reference guide for obssessive HP fans) would constitute fair use of Rowling's works. The online guide when examined by many, seems to reflect extensive research on the subject as well as being a transformation of Rowling's books- having compiled reports, interviews, hoaxes, curricula at Hogwarts- over a decade.

However, as per testimony (available on the Stanford Fair Use Programme site) Ms. Rowling seemed unfazed by this effort, and only reiterated her own plans of compiling a Harry Potter encyclopaedia. Rowling also demeaned the quality of Mr Vander Ark's book, which is legally irrelevant. She apparently appeared condescending, and self-involved and even made unnecessary statements such as "It's very difficult for someone who is not a writer to understand". Believing that allowing this case, would leave the floodgates open, Rowling has clearly exhibited that she feels strongly about her works being hers and hers alone.

The extent to which Rowling has taken the enforcement of her rights seems monopolistic, and in my personal opinion, very gluttony. The New York Times business writer... called Ms Rowling a "copyright hog".

While Rowling's works are excellent, and I myself am a huge fan of the series, it is reports like this that lead us to reflect on what we admire- the work or the person behind the work. In this case, I think Ms. Rowling has shifted the focus of her fans from all her books and has needlessly spent long hours fighting battles that make her seem greedy. As reported by SpicyIP before, the profit driven motive, despite many denying it, is a huge factor in preventing copyright infringement. But maybe it is time for eminent authors such as Ms. Rowling to reflect on what she has possibly done here- discourage many obsessive fans from carrying on a love affair with this book only because of her over-aggressive coyright enforcement drive.

Read the full report by the Financial Times read here

Roche v. Cipla: The 'Mint' interviews Roche India's MD on the recently concluded Tarceva litigation

The Mint recently carried an interview of Mr. Girish Telang, managing director of Roche Scientific India Pvt Ltd, the Indian unit of Switzerland-based F Hoffmann-La Roche Ltd. Incidentally this interview seems to be one of the few public statements by Roche, in regards, its high profile litigation against Cipla over Tarceva. (We've blogged about the Roche v. Cipla litigation here.)

SpicyIP however was rather surprised by the re-statement of some facts by Mr. Telang, since all these facts were very effectively countered by Cipla at the stage of arguments in the Delhi High Court. The fact that Cipla’s counter-arguments were indeed effective is apparent from a reading of the Delhi High Court judgment.

Firstly he states that the media keeps misrepresenting the price of Tarceva as Rs. 4800 when the actual price is Rs. 3200. This point about Tarceva costing only Rs. 3200 was made by Roche’s counsel in the Delhi High Court judgment but Cipla effectively countered this by actually producing copies of bills and packaging of Tarceva which clearly established that the price was indeed Rs. 4800 and that a strip of 10 tablets cost Rs. 48,000. (para 80 of the judgment). The Delhi High Court seems to have been completely convinced with this argument because later on in para 84 of the judgment the HC states that “The defendant's product Erlotinib, on the other hand, is marketed at a third of the cost of Tarceva; it costs Rs. 1600/- per tablet”. This was crucial to the final outcome of the case, since the fact that the innovator drug was thrice the price of the generic drug appears to have influenced the HC in coming to its decision that it would indeed be in public interest to allow Cipla to continue manufacturing the generic drug. It is quite surprising that Roche could not even convince the judge of the price of its own product!

Secondly Mr. Telang states that “the Rs3,200 tag includes 32% customs duty. If you remove this duty and then look at the cost, it is only 15% more than that of the generic version, and I’m sure that much reward the innovator should be allowed to have.” This argument was countered by Cipla’s counsel who asserted that the price of its drug was Rs. 1600 after including “huge” excise tax. (para 41) The judgment never again touched on this aspect and one may assume that the judge seems to have bought Cipla’s argument. Admittedly the rate of customs and rate of excise are different and Roche would have been more convincing if it had accurately pre-empted Cipla rebuttal.

Thirdly Mr. Telang states that “We have assistance programmes where we support patients, free of cost. I don’t have numbers but, whenever a patient needs assistance and the doctor requests us, we always provide it. And, it is not just for Tarceva, it is for all our oncology products but, we don’t highlight such efforts.” If this statement is true, why in god’s name didn’t Roche even make a mention about this in Court? I seriously doubt the veracity of this statement since there is absolutely no mention of any such program on Roche India’s website (which by the way seems to have been last updated in 2005 – it doesn’t even mention Tarceva as one of their products!) or in any other search on the internet. Roche however does have patient assistance in America. Most pharmaceutical companies usually go out of their way to publicize such efforts.

The aforementioned points are going to be crucial to Roche’s appeal and if it indeed does want to win the appeal in its favour it needs to do it homework this time. A good starting point would be to copy Glivec’s GIPAP program in order to ensure that no patient goes without Tarceva for the mere reason that he cannot afford it. Such a noble gesture would undoubtedly convince any appeals court that ‘public interest’ has been taken care of.

India-USPTO conference on TK & patenting kicks off in New Delhi

The Financial Express reports that India, the United States Patents & Trademark Office (USPTO) along with representatives of Saarc countries and WIPO are having a three day conference in New Delhi to deal with developing countries concerns in regards the protection of traditional knowledge (TK), genetic resources & folklore – all of them being subjects not adequately covered by TRIPS.

Readers may remember that Sumati had, way back in Novemebr 2007, pointed out to an ET article on the efforts of the Indian Government to get the US to sign an agreement to protect Traditional Knowledge. At that time the Indian government was trying to persuade the Americans to sign an agreement on sharing the Indian traditional knowledge digital library so that it can cross-check with India before granting patents on products and their properties and uses that have been known in India for centuries. The reason behind this move was the fact that a large number of patents were being granted by the USPTO although these patents were actually based only on Indian TK without an independent inventive step.

The above issue is one of the major issues that is sought to be covered in the current conference. While the Indians do not want this data-base to be put in the public domain the Americans are insisting that the database be made public. The Americans argue that that it is only when the library is in public domain can they invalidate a patent on the grounds that the invention was already a part of a prior art. It is going to require all the negotiating skill of the Joint Secretary DIPP – N.N. Prasad – to reach a mutually agreeable situation.

Other issues that will most probably be dealt with in the conference are the issue of disclosure of source of biological resources in the patent application. SpicyIP has already blogged on this issue over here and here.

While it is great to see the Indian Government pushing so hard for the protection of TK, SpicyIP would like to remind the government that they are yet to amend the Biological Diversity Act to ensure that Prior Informed Consent is indeed a mandatory requirement of the law.

Pointing Fingers: Accusations fly as Roche-Cipla continue to lockhorns.

The latest in the Roche- Cipla patent war are allegations of wrongful promotion of Erlocip. This is the same drug that Roche held a patent for, but Cipla continued to manufacture in India. Readers will remember Shamnad's extensive post on the Roche-Cipla judgment that revolved around this very drug.

As per the letter dated 27 March, 2008, Cipla allegedly distributed promotional literature on Erlocip for the treatment of four kinds of cancer (non-small lung cell, pancreatic, neck & head cancer and colorectal) without regulatory approval to treat the same, as per Taksal Pharma Pvt. Ltd, Roche's Indian distributor. Roche itself has just recently secured approval Roche itself has only secured approval for Erlotinib to be used for only 2 forms of cancer- non small-cell lung & pancreatic.

The Drug Controller in an interview with Livemint has stated on record that he will allow them to make their standpoint clear with evidence before any action is taken for a serious issue such as this. If the Drug Regulator comes to this conclusion, Cipla could potentially be subject regulatory action as the same is viewed very seriously under the provisions of the Drugs and Cosmetics Act, 1940 with regard to the potential danger such marketing practices can cause. Hypothetically, the Drug Regulator could preliminarily issue the Company a warning to desist and, (in the worst case scenario) cancel the licence for manufacture of the drug.

This new twist in the Roche-Cipla case is almost certain to have an impact in the case now in appeal before the Division Bench.

Gauri Kamath's Coverage of the Proposed Bayh Dole Bill

In an exceptionally well written and researched piece on the proposed Bayh Dole style bill in India, Gauri Kamath of Businessworld asks:

"Is Greater Patenting of Research Funded by Taxpayers Beneficial?�"
As readers may be aware, SpicyIP has been pushing for more transparency around this bill. We are extremely happy to note that journalists such as Gauri are making an effort to understand the various nuances and complex issues around this proposed bill. And their incisive analysis and coverage will go a long way towards spurring the government to open this issue up for healthy debate. For those wishing to read Gauri's full piece (with photos, figures etc), please see here. I reproduce the text version below:

"A bill to step up the patenting of taxpayer-funded research has stirred a hornet’s nest. The Public Funded R&D (Protection, Utilisation and Regulation of Intellectual Property) Bill, 2007, soon to come up before the Union Cabinet, has sparked sharp criticism in some quarters. This portends a less-than-speedy passage to the Bill becoming a law. The spotlight on it has also revived controversies about the role and performance of public-funded research in Indian universities and laboratories.

In a line, the Bill seeks to boost the commercialisation of government-funded research in a two-step process. First, it requires institutions to report patentable inventions to funding agencies within a specified period of time, failing which they forfeit their patent rights to the agency. Second, institutions that receive funding must set up intellectual property management cells (IPMs), which will patent inventions and earn revenue by putting them to good use. As an incentive, the inventor and the institution will get to keep a part of the proceeds, also quantified in the Bill.

The government spends a lot of money on research, which is abandoned after a point of time,” says K.K. Tripathi, advisor to the Department of Biotechnology in the Ministry of Science and Technology, which is piloting the Bill. “The purpose of this Bill is to get this research commercialised for public use and for the benefit of society.”

The Bill appears to be well-timed. The Indian industry is targeting global markets and companies are actively seeking ways to partner the academia to leapfrog the innovation process. They would doubtless prefer it if all such collaborations result in a product or a service with at least some degree of market exclusivity.

“Patenting does two things,” says Samir Brahmachari, director general of the Council of Scientific and Industrial Research (CSIR), the apex organisation that oversees 38 government research institutions. “It demonstrates innovative strength, and also gives the industry the comfort needed to licence an invention.”

Indeed, the academia is becoming more aware of the possibilities of monetising intellectual property (IP). “There is no free meal in today’s world,” says Ganapati Yadav, dean (research, consultancy, resource mobilisation) at the University Institute of Chemical Technology in Mumbai. “How do we run an institute? We have to pay good salaries… all the money can’t come from the government.”

But for all its progressive intentions, some call the Bill a misguided and ill-studied attempt. “One should not rush into a legislation of such importance,” says Amit Ray, professor of economics at the Jawaharlal Nehru University’s School of International Studies. “While one is not against formalising the whole thing, it has to be backed by research and data, which does not seem to the case.”

Empowering Science And Scientists
Lalji Singh, director of the Centre for Cellular and Molecular Biology (CCMB), a leading government lab in Hyderabad, says that universities outside the government’s apex network of research institutions are “totally confused” about what to do once they stumble on something interesting. “There are absolutely no guidelines,” he says.

Scientists will, therefore, welcome the Bill because it has the potential to empower institutions in their dealing with the industry. Consider Manju Ray, professor and head of biochemistry at Kolkata’s Indian Association for the Cultivation of Science, founded by Nobel physicist C.V. Raman in the 1930s. Until recently, “There was no patent cell or a system of entrepreneurship,” Ray told BW over the phone from her laboratory.

Ray says she paid the price when, at the turn of the millennium, she allowed New Delhi’s Dabur Pharma — a cancer drug research and marketing company — to own patents for her research on an anti-cancer drug on the assumption that the company would make the drug commercially available. “But they did nothing with it, just sat on it,” says Ray. “If the Bill comes into action, then I think universities and institutes like ours will benefit.” The Association now has the makings of a patent cell, she adds. A Dabur spokesperson said the company could not comment within BW’s deadline.

“Giving patent rights to institutions and a share in the royalty to the inventor is one way to incentivise research,” says Amlan Goswami, a research associate with the National Knowledge Commission, which advises the Prime Minister, and is pushing for the Bill. “Today, if an institution decides not to share rewards with the inventor, it can do so. But the legislation would bring everything under a common umbrella and make it uniform.”

Problematic
The Bill appears to assume that public-funded R&D cannot be genuinely fruitful without protection for IP. Dinesh Abrol, a member of the Delhi Science Forum (DSF), a Left-leaning science and technology policy watchdog, thinks otherwise. “The real challenge is not IP protection, it is the absence of research structures and enough research,” he says. Science and technology spending is less than 1 per cent of India’s GDP versus the 1.23 per cent in China and 3 per cent in the developed countries.

Many scientists have found patenting itself a debilitating task. S P Bhatnagar, a physics professor at Gujarat’s Bhavnagar University, describes his experience as “a tremendous effort”. For one, there are hardly any patent experts to be found outside the metros, making it challenging for mofussil universities to staff a competent patent cell. “Even the patent offices are short-staffed, so where do we stand?” he asks. Department of Biotech’s Tripathi reiterates that the shortage of expert staff will soon be met as more IP courses become available. But, as of now, universities and research institutions do not know the right approach to commercialising a patent.

While it is prohibitively expensive to file for and maintain an international patent — it costs lakhs — Indian patents have little value in a globalised world. Tripathi admits that universities will need resources to administer patents. The Bill provides for a certain percentage of monies to be set aside for patent management, he says.

Meanwhile, Bhatnagar’s department is short of manpower to teach, leave alone research. It is rather like recommending cake when bread cannot be afforded. “What the Indian system of innovation needs is basic nutrition, not a booster dose,” says Abrol.

TROUBLE WITH THE LAW
In 1980, The US enacted the patent and trademark act (amendments), commonly referred to as the Bayh-Dole Act after the Senators who sponsored it. The Act created a uniform patent policy among many federal agencies and, in the words of The Economist, “unlocked all the inventions and discoveries made in laboratories through the US with taxpayers’ money”.

But has the Bayh-Dole Act of the US prevented the sharing of knowledge by allowing universities to put profit above all else, much like corporations? The Act gives the discretionary right to decide whether or not to patent an invention to the intellectual property management cell or technology transfer board of an institution, and not to the inventor. “The performance of these cells is typically measured by patents and licensing fees,” says Shamnad Basheer, a New Delhi-based associate at Oxford Intellectual Property Research Centre, and a former law professor at America’s George Washington University. Universities can be blinded by lucre. In the 1970s, Columbia University scientists — using US government funds — came up with an invention that formed the basis for many biotech drugs. Through its patent life, Columbia reportedly earned $600mn (Rs 2,400 crore). But after the patent expired, it got a new one with some small changes and threatened to revoke the licence unless companies continued to pay. The companies sued and Columbia lost. Reports suggest the new Bill in India gives the government ‘march-in’ rights in certain cases but the details are unknown yet.

Cogito Ergo Sum
For long, the academia has seen its role as pursuing ‘basic research’ or research that expands scientific knowledge without necessarily generating a product or service of commercial value. The underlying assumption is that ‘applied science’ can be built by user industries. This has remained practically unfeasible.

Often, research is too ‘embryonic’, says Kamal Sharma, president of Mumbai drug maker Lupin, whose company has tied up with the academia. “Hypothetically, you may get a patent to solidify oil into margarine in the lab, but it’s of little use till it is scaled up and margarine-making can be taken to a factory,” he says. So far away from commerce is this research that building on it does not save much effort for the industry at all, he says.

In Sharma’s opinion, the problem with public-funded research today is “a lack of rigour in the labs to scale up”. Specifically, it’s the absence of investments in pilot plants to test scaleability, and the absence of networking between various scientific disciplines to give research a better direction.

“Universities can contribute to tech transfer but for that we also need to encourage entrepreneurship (among scientists),” says Abrol. This could be one reason why the CSIR, which tops the list of Indian patent holders and has a centralised intellectual property management division, earned a meagre Rs 14 crore in licensing revenues in the last five years. Its annual budgetary support from the government tops Rs 1,000 crore.

Some purists like JNU’s Ray are against forcing scientists in public labs to think in terms of the market. “Their job is to push the frontiers of science,” he says. There is also a cultural difference between India and the US, where the Bayh-Dole Law was enacted (see box ‘Trouble With The Law’). In the US, universities were active patenters and licensors for decades before 1980.

“Patenting is a very new thing for us. In India, the culture is still to publish rather than patent,” says Bhatnagar, who has published 24 articles and owns two patents. But, “We are suffering due to the extremely long delays in patenting,” he says. “Who wants to wait for over a year? One would rather just publish.”

It is as yet unclear whether either the government or the NKC has commissioned a detailed survey of the state of public-funded R&D and the hurdles it faces. “The Commission’s role is to provide a roadmap and not to get into details,” says Goswami. It must be hoped that when pure science seeks commercial application, success does not remain as elusive as those details.

gauri.kamath@abp.in
(Businessworld issue 8 - 14 April 2008)

Moser Baer in Tamil film titles tussle

So we're back to a pet SpicyIP subject (beyond the pharma buzz): home entertainment and the Moser Baer (MB) phenomenon. This time around, the optical disc manufacturer-turned-home video giant is in a tussle over alleged copyright infringement of its newly-expanded Tamil film titles' list. Although the question right now is preliminary and primarily jurisdictional, it will be interesting to see whether similar issues get raised by rights-claimants in other non-Mumbai film industries.

What I gather from the latest HT report is that MB had petitioned the Delhi High Court against Movie Land, a Chennai-based film distribution company, over copyright issues. Movie Land then approached the Supreme Court seeking a transfer of the case to the Madras High Court, stating that MB had filed a petition in Delhi "just to harass it". Movie Land has also alleged that MB "had been distributing many Tamil films through its network without its mandatory permission." The Supreme Court in turn has sought a reply from Moserbaer as to why the case should not be transferred.

Movie Land claims to have limited copyright (exclusive VCD, DVD and LD rights) of more than 1,450 Tamil films, and has purchased copyright and negative rights from the film producers or from copyright holders for home video distribution.

That MB has been trying to expand its movie selection is old news. Indeed, on its home page, it claims that:
[It] will be the first pan-India company to offer Home videos in every popular language of India. It currently offers home video titles in Hindi, English, Tamil, Telugu, Malayalam, Kannada, Marathi, Gujarati, Bengali and non-film categories. Soon, it will be offering titles in Punjabi, Assamese, Oriya etc.

While MB might be celebrating its ever-expanding catalogue, this case, and an older case pending in Madras since March 2005 (according to the news report), seeking to restrain Modern Cinema and others from distributing some Tamil movies on CDs and DVDs, suggests that there is still trouble on the front.

It might be mere speculation, but I will not be surprised if MB is using strong-arm tactics against smaller players to achieve its lofty goal of becoming the first pan-Indian home entertainment company, etc. Forced acquisitions in what is an extremely disaggregated regional film industry would perhaps be the only way to go about this task. And yet, while this consolidation attempt might end up bridging linguistic/regional barriers, and MB may yet be applauded for playing pioneer (I love taking the macro-view, heh), sometimes one wants the underdogs to take it to the wire, just so as to be able to see a good fight.