Parliamentary Report on the Patent System - The Good, the Ugly and the Doubtful

It recently came to our notice that the Department related Parliamentary Standing Committee on Commerce tabled its 88th Report on ‘Patents and Trademark System in India’ way back on 24th October, 2008. Usually Parliamentary Committees are quite participative and atleast attempt to invite as many stakeholders as possible in the discussion leading to the finalization of the report. This is all the more true when the Committee takes more than 3 years to complete such a basic report. However even after 3 years of work the reasoning in the Report is perfunctory and quite a few of its findings are merely reproduced from the submissions made to it by the 10 parties listed below.
This Report has limited submissions to only 10 people/institutions - Justice Krishna Iyer, 3 NGOs (IMAK, MSF & Lawyers Collective), 2 industry organizations (OPPI & IDMA), one lawyer (CLG), one bureaucrat (Former Controller) and one academic institution (NLU, Jodhpur). Notable exceptions include any of the top 5 IP law firms, any of the 18 IPR Chair Professors established by the HRD Ministry & also business chambers such as FICCI.
As with any report this report too has the good, the wrong and the doubtful apart from the ‘technical inaccuracies’. Due to a paucity of time I’ll list just the bare minimum below.

The good
1. The Committee very strongly recommended that the patent office provide a publicly searchable digital patent database, with a possible amendment to Section 145, so as to create a stronger, more transparent patent system where patents can effectively be searched and opposed by any person. In fact transparency has been a point on which the Committee has harped time and again. As many of our readers already know SpicyIP has been a strong proponent of greater transparency in the Patent Office and has even petitioned the Government on this point time and again. I was however a bit surprised to note that a substantial portion of para 5.5 of the report (regarding increased transparency) has been reproduced verbatim from IMAK’s submission to the committee, that is available on p.127 of the Report. Since the Committee has annexed all submissions to it, this slight oversight would not technically qualify as plagiarism. Having said it bears noting that the Committee was headed by Dr. Murli Manohar Joshi, who once upon a time headed the Ministry of Human Resources and Development, which is the Ministry in charge of Copyright Laws and higher education throughout the country.
2. The Committee also recommended that the number of examiners in the Patent Office be increased in substantial numbers along with a re-worked compensation package so as to attract better talent. It also provides various suggestions to improve the quality of examiners.
3. The Committee also asked the Government to clarify the meaning of ‘efficacy’ and ‘significantly’ in Section 3(d) of the Patent Act. It also requested the Government to clarify the meaning of per se in regards software patents under Section 3(k). It’s interesting to note that this suggestion was made on the basis of the submissions by the Kolkotta and Chennai patent offices. Of course the Report has almost no suggestions on how either clarification should be carried out.
4. The Committee also accepted Mr. Keayle’s suggestion that the Government should attempt to fix the royalty rates that will apply in the case of compulsory licensing of pharmaceutical products in an emergency situation. Countries like Canada already have fixed royalty rates for exports made under the Doha Declaration.
5. In regards GIs the Committee urged the Government to ensure that Article 24 of TRIPs, regarding Spirits and Wines, extended to even Article 22.
6. The Committee also recommended that the Department should take all possible efforts to ensure that India is designated as an International Search Authority (ISA).

The ugly
Some of the conclusions of the Committee are just horribly wrong. I’m going to list just a few of them below:

1. In para 5.39 the Committee reproduces verbatim from Mr. Keayle’s submission (on p.87) the following:
Article 70.3 of TRIPS Agreement provides that there shall be no obligation to restore protection to the subject matter which, on the date of application (i.e. 1st January, 2005 of TRIPS Agreement) for the Member in question has fallen into public domain. There are reportedly 36 products, with a turnover of over Rs. 3000 crore, which the domestic enterprises were producing as on 1st January, 2005, for which mailbox applications were filed by the applicants. Instead of implementing this provision, the amended Patents Act stipulates that those enterprises which have been producing mailbox products on 1st January, 2005, will have to pay royalty to the patent holder during the remaining period of the patent, and this amount of royalty works out to more than Rs. 150 crore annually to MNCs, even if paid @ 5%.

The Committee then goes on to berate the Department in the following words:

The Committee express surprise that the Department allowed a loss of valuable foreign exchange due to this provision, which could have been avoided, had the Department made use of Article 70.3 of TRIPS Agreement in the amended Patents Act. The Department should have taken advantage of this flexibility, to safeguard public interest in respect of availability of medicines at competitive prices through the domestic enterprises. The Committee, therefore, recommend that the Department should consider to implement this provision in future, by way of amendment to the Patents Act.

As per my understanding this is an erroneous interpretation of TRIPS. Article 70.3 merely implies that India need not extend protection to patented subject matter that is already in the public domain. This would refer to all pharmaceutical inventions claiming a priority of before 1995. The royalty provision in regards mailbox applications referred to above is actually the proviso to Section 11A which in fact is implementing India’s treaty obligation under Article 70.4. I’m quite ‘surprised’ that the Committee missed reading out Article 70.4.

2. In para 5.44 the Committee states the following:
The Committee is also of the view that it is in the interest of the country to have a Patent Law which has correlation with our Health Policy and is also pro-generic industry. On its part, the pharmaceutical industry in the country should also shun profit-centric approach, and look at the problem from a human angle. The guiding principles for the Patent regime as well as the Industry should be affordability, safety, accessibility and availability of a pharmaceutical system, which provides a coherent, cogent and people-centric health system in the country.

It is beyond my limited understanding as to how a Committee can state with such conviction that the Patent Act, an act meant to incentivize innovation, should be unabashedly pro-generic industry. Clearly objectivity was not a criteria for this committee. In my opinion the committee seems to be under the mistaken opinion that it was drafting a public health legislation instead of a legislation dealing with innovation.

3. In para 5.45 the Committee states the following:
The Committee feel that the provision of compulsory licencing contained in Article 31(b) of the TRIPS Agreement is extremely important to ensure effective role of the domestic industry to meet the demand for patented products in the country. Implementation of this provision would also open avenues for exports The Department should, therefore, make provision for implementing TRIPS 31(b) Article in our Patents Law at the earliest.

The Committee time and again notes that compulsory licensing provisions are already available in the Patent Act and yet it asks the Government to create a provision to implement Article 31(b) which is nothing but a compulsory licensing provision.

4. In para 5.48 the Committee states the following:
Since the consequences of Data Exclusivity are quite serious, the Committee strongly recommend that the Government should not fall prey to such demands of MNCs. The Government must thwart such attempts, being made at the behest of certain vested interests. It should also guard against moves to enter into FTA with USA, as the developed countries, particularly the USA, are trying to bring in certain TRIPS Plus measures through Bilateral and Regional Agreements.
In the build-up to this conclusion the Committee did not once discuss the rationale for Data Exclusivity. More importantly it did not make a single mention of the Reddy Report to the Ministry of Commerce on Data Exclusivity despite the fact that both points were covered in OIPPI’s submissions.

The doubtful
1. In para 5.12 the Committee states something which I just cannot understand:

A view in favour of pre-grant opposition is that, in a way, it forces the patent office to do better analysis of patent applications. It also forces compulsory licensing for drugs, when a patent is granted.

What is the connection between pre-grant opposition and compulsory licensing? I was curious as to where they got the idea from and so I searched. Turns out that this extract too is a verbatim extract from Leena Menghaney’s submissions on page 112. If anybody can understand it please do feel free to explain it to me.

2. In para 5.46 the Committee states the following:
The Committee express anguish that the Exclusive Marketing Rights Regime was allowed to prevail over the basic Public Health System. The Government should, therefore, take immediate steps to align the balance of convenience, as per the Indian patentability criteria laid down in the Act of 2005 so that the Public Health System does not suffer due to the Exclusive Marketing Rights Regime (EMRs).

This a slightly baffling proposition. On a reading of the report it came to light that the Committee seems to have come to this conclusion on the basis of Leena Menghaney’s submissions on the 18th of December, 2007 at p. 111. I’m slightly baffled with the Committee’s ‘anguish’ because the 5 year EMR system was abolished in 2005 and instead replaced by a 20 year patent system. So why the ‘anguish’ with only the 5 years term and not the 20 years term? And as far as I know , and I could be wrong on this, there were very few valid EMRs in India in the year 2007, certainly not enough to be anguished about and the last possible EMR granted would expire this year, with the exception of the pending GSK EMR application.

3. In para 5.54 the Committee while urging the Government to fight ‘Patent Harmonization’ ‘tooth and nail’ reproduced verbatim with acknowledgement, the following, from the Indian Drug Manufacturer’s Association (IDMA):
that the issue of Patent Harmonization, which provides for uniform law on Patents for all countries of the world, was nothing but a ploy by the United States to substitute the law of that country on all the countries of the world. In a world where every country had different Constitution, different commercial laws, different economic laws, and different stages of development, it was downright not possible to provide for a uniform patent law for the entire world.
Believe it or not this is the only reason given by the Committee while concluding that the Government should fight the proposal ‘tooth and nail’.

Conclusions: Regardless of the several inaccuracies listed above I think it’s necessary to commend some of the finer points of the report most of which have been borrowed from the submissions of IMAK to the Committee. The only point that I was not sure about was in regards Section 144 of the Patent Act. There must have been some underlying rationale for Ayyangar to recommend that examiner’s reports remain confidential until a Court grant leave to inspect the same. I’ll get back on that in another post.

Cipla Attracts NPPA’s Attention Again

Cipla has become an NPPA magnet given the number of times it has run into trouble with the latter which has yet again issued notices on alleged overpricing by Cipla of two drugs Salbutamol (prescribed for asthma) and Norfloxacin (prescribed for infections). According to the Economic Times, based on a filing by Cipla at the Bombay Stock Exchange, the company has received two demand notices, one for Rs 64.39 crore, which includes Rs 43.29 crore, allegedly overcharged, and interest of Rs 21.10 crore up to June 2009 in respect of Salbutamol; and the other for Rs 2.19 crore comprising an allegedly overcharged amount of Rs 1.45 crore for the period October 2005 to March 2006 and an interest component of Rs 74 lakh for the drug Norfloxacin.

The company’s response has been to refute the allegation citing a Supreme Court ruling according to which the NPPA’s claim is “untenable and not sustainable”. Until such time the details of the ruling and the notices are known, it would be imprudent to comment on the issue. But that said, this is not the first time Cipla has locked horns with NPPA; in 2003, a fine of Rs. 180.37 crore was slapped on the company for alleged overpricing of five drugs, but the notice was held invalid by the Allahabad High Court and subsequently, this order of the High Court was challenged in the Supreme Court by NPPA. Again in April 2007, a demand notice for Rs.748.27 crore was sent. So it is clear that there is a certain pattern to these things…

In a thought-provoking post earlier, Mr.Basheer had drawn attention to the fact of Cipla charging Indian patients 150% more than its South African consumers and yet claiming to speak for public interest on certain occasions…In fact, in an earlier post, I had referred to a statement made by Dr.Yusuf Hamied, Chairman of Cipla, who was of the opinion that “only generics-makers like his firm provide genuine competition to Big Pharma, which he insists should have no patent rights in poor countries.” (More than the post, the comments to the post make for an interesting read thanks to some brilliant points raised by a well-wisher of SpicyIP and a dear friend of mine).

I am not sure how does one reconcile Cipla’s professed claims of representing public interest and notices of overpricing such as these nor am I sure if one can draw a conclusion which is generally applicable to all generic manufacturers, but the fact remains that entities like Ranbaxy and Cipla have often found themselves falling within the NPPA’s scanner. Here I would like to reproduce my thoughts which I had shared with Mr.Basheer during the Roche-Cipla imbroglio where “public interest” was sought to be factored as part of the analysis for grant of temporary injunctions.

Before I proceed, I disclaim harbouring prejudices against any entity or group/class of entities; my sole intention is to convey that when a particular person/entity puts forth a particular proposition, in public or private, he/it must ensure that he/it has the moral authority to act as proponent of such proposition. With specific regard to the issue on hand, what this means is that purveyors of public interest must ensure that their hands are clean before they don the mantles of self-proclaimed ombudsmen, more so when the presence of a vested commercial interest cannot be denied in entirety. What has this got to do with the generics v. Big Pharma debate or drug (over)pricing? Let me explain myself better…

Almost a year ago I had a free-wheeling discussion on pricing of drugs with a brilliant colleague and friend of mine who (un)fortunately has first-hand knowledge of how things work on the ground and who could not help being cynical at the thought of generic manufacturers taking a high moral ground on the issue of public interest. In the course of the discussion, both of us agreed that ideally the stage of the disease and the costs already incurred by the patient at the stage when a drug is prescribed, too must be factored when Courts consider the price of the drug. To support this, he cited a live example of a person with chronic renal problems who needed a transplant.

Apparently, the transplant in itself has become an established procedure with high success rates, but the actual problem starts after the transplant because the body starts acting against itself, to counter which immunosuppressants are given. These have to be continued for close to 12-13 years after the surgery (which in most cases is the period the patient lives after the operation; in other words, he has to take this medication for the rest of his life). It is not unusual to find that the patient has stopped taking such medication after 5-6 years, but usually he survives. Some of the transplant patients do not respond favourably and their bodies slowly work against themselves and at some point, the immune system declares an all out war against every organ and the whole body is on fire; this is called septic shock.

Only a shot of a particular drug (my memory fails me here and my apologies to the readers for the same) which could either save the patient or could be fatal, is the way out. At this point the doctor says, "Look, there's an injection which might work and is our only hope; it costs Rs.1, 75, 000 (this is the true figure), do you want to go for it?" How does one answer this question? Depends on what you value more, money or the patient. What if the patient is someone very close, but you cannot afford it though the doctor is actually quoting the price of the generic version and not a branded version!

If the person is resourceful and lucky, his best option is to run straight to the manufacturer and not the retailer where he can buy the injection at probably 60-70% of the original cost of the generic drug. This means that even at such prices, the manufacturer makes pretty decent profit. Here’s where one is tempted to ask, where’s the public interest factor here which generic manufacturers claim to fight for?

My friend reflected that all said and done, the cruel irony today is that some manufacturers have become self-styled protectors of "public interest" making a total mockery of the concept and intent behind the law- which, I personally believe, is to ensure that at the most crucial and vulnerable juncture in the patient's and/or his relative's life, when they have to choose between life and death (rather dispensability or otherwise of the patient in some cases), they are not fleeced, literally and figuratively, to death.

The point is when fixing what amounts to a reasonable price of the drug, factors such as the costs incurred by the patient when he has to opt for the drug have to be taken into account. In certain cases, the cost of the transplant and follow-up medication are to be considered, but Courts, as far as I know, restrict themselves to a relativistic approach where only the price of the generic drug and the branded version are compared. Such an approach suffers from a huge factual vacuum for the Court has a truncated, if I may use Jinnah’s infamous phrase, "moth-eaten" version of the picture.

The point to be borne in the big picture is that pharmaceutical companies are certainly not expected to run businesses at the expense of hurting themselves nor are we naïve enough to forget that they do have profits to make, which is perfectly fine. However, not every kind of business can be treated the same way nor are the standards of behaviour the same; such being the case, where an issue as critical and as sensitive as public health is the very field of enterprise, it is not wrong to expect and set higher benchmarks for behaviour, more importantly, which are equally applicable to generic manufacturers and so-called “Big Pharma”…..

On the issue of overpricing by manufacturers, we would like to hear from some of our better informed and articulate readers who have enlightened us time and again with their insights. Also, not being a person from the health sciences background, if I have erred on the technical aspects or the science, I shall be delighted to stand corrected.

IPAB on a Roll: Ramkumar's Dual SIM Patent Suspended

Not content with having created its own law by ruling that "excessive pricing" can be used to reject a patent, the IPAB was at it again.

On the 13th of July, in a remarkable development for intellectual property law, the IPAB suspended the operation of Ramkumar's patent! And much like the Madras High Court reported earlier, it did so very crytically in a one para order that reads as below:

"Counsel for the applicant present. Despite service of notice in M.P. Nos. 11 & 12/2009, none appeared on behalf of the respondent. Interim stay of operation of registered patent No. 214388 granted till September, 2009. Let the matter be posted for hearing in the month of September, 2009. The Registry is directed to issue notice of hearing to both the parties. Accordingly, M.P. No. 11/2009 stands disposed off."

This order was in relation to a revocation petition filed by Spice Mobiles Ltd before the IPAB against Ramkumar's patent. A similar revocation petition by Samsung is also pending before the IPAB. The petitioner prayed that since the final order (either validating or invalidating the patent) may take a while, the IPAB pass an interim stay against the operation of the patent.

Firstly, I'm not entirely sure whether a normal court of law can "stay the operation of a patent"? There is nothing in the Patents Act to support such a suspension of the operation of a patent. However, the court may restrain a party from enforcing his/her patent.

And even if under some stretch of the court's powers under the CPC, it might be permissible for a "court" to order a broader suspension of the "operation of a patent", it is a huge stretch to assume that the IPAB, a mere tribunal vested with the power only to decide on "validity" issues, can do so. Matthews George, an NUJS student who has guest blogged with us earlier will soon bring you a detailed post on the legality or otherwise of the IPAB order.

As we've been stressing on this blog, Ramkumar's patent is questionable and his case a very weak one. However, this order might be one instance where the law might favour him. We can expect an appeal from him to the High Court, challenging the legality of such a revolutionary order by the IPAB.

Clearly, the IPAB is on a roll....and unless it reins itself in and thinks through its orders, it is likely to notch up a record number of "reversals" from the High Courts. And more importantly, it could come under some serious scrutiny from the government.

Patent Office to issue Electronic Notifications

The Consultative Working Group on Patents, Designs, Trade Marks system in India is constituted by the Federation of Indian Chambers of Commerce and Industry. The group is constituted to highlight the concerns of the Indian Industry in relation to Intellectual Property to the Government. Numerous changes have been brought about by the recommendations of the working group in the working of the intellectual property regime in India. To name a few; a separate wing was established in the Mumbai Patent Office exclusively for data analysis, online availability of Controller's decisions.

The latest reform which has been introduced by the newly appointed Controller General Mr. P H Kurien on the recommendations of the fifth Consultative Working Group on Patents , Designs and Trademarks in India (held in April, 2009) is the issuing of electronic notifications to patent applications which has come into effect from the beginning of this month. Correspondence in electronic form will go a long way in expediting the process of obtaining patents.

The notification dated 19.06.2009 was published on the website on 23rd June, 2009. It said that all communications including notices and examination reports to patent applications, patent agents would be sent through electronic email that has been mentioned in their documents. It instructed applicants or agents who have not provided their email ID to submit the same to their respective Patent Offices. It also directed patent applicants/patent agents to fill in their e-mail address in the application for patent (Form-1).

Introduction of electronic communication will lead to easing of the burden of both the patent office and the applicants. There is no need for the applicant to be physically present at the mailing address. The delay owing to traditional means of communication often led to abandonment of the patent application. In the words of FICCI's Director General Amit Mitra “Introduction of electronic correspondence is a boon for stakeholders as it will ease the task of patent prosecution in India, especially for applicants residing in foreign countries.” This is an important step taken by the Patent Office towards meeting international standards and speeding up the patent process.

Spicyip thanks Sheetal Chopra of FICCI for bringing the news to our notice.

The USIBC Report on Incremental Innovation: An Analysis

Section 3(d) of the Patents Act, 1970 is a unique provision in the Act which seeks to prevent ever greening of patents by preventing the patenting of new forms of known substances which do not have enhanced efficacy. The provision was intensely debated upon and discussed in the context of the 2007 decision of the Madras High Court in the case of Novartis AG v. Union of India, (2007) 4 MLJ 1153. Novartis alleged that the use of expressions like “enhancement of known efficacy” and “differ significantly in properties with regard to efficacy” without being defined rendered the section ambiguous as it vests unfettered discretion with a Statutory Authority. This was also alleged as delegation of an essential legislative function. The Court however considered the fact that the decision could be appealed and that the definition had to be determined on a case to case basis. The Court also said that there are in-built materials in the Section and the explanation itself, which would control/guide the discretion to be exercised by the Statutory Authority. The Madras High Court pointed out that Section 3(d) is an instance of delegation of a non-essential legislative function which is Constitutional. The Court relying on medical dictionaries ruled that the term “efficacy” means therapeutic efficacy. It was held that the patent applicant is expected to show how effective the new discovery made would be in healing a disease/having a good effect on the body. The Court thus upheld the Constitutionality of the Section and ruled that did not have the jurisdiction to rule on its compatibility with TRIPS. The High Court also transferred the petition in seeking reversal of the order of the Assistant Controller to the Intellectual Property Appellate Board (IPAB). The IPAB has ruled that Glivec is not patentable as it constituted non-patentable subject matter under Section 3(d). For an overview of the decision of the Appellate Board one can refer to a previous post on the same.

A report titled “The Value of Incremental Pharmaceutical Innovation: Benefits for Indian Patients and Indian Businesses” was prepared for the US-India Business Council by White and Case LLP and Dua Consulting and presented at the meet of the Council in June 2009. (Refer to previous post titled USIBC and Section 3(d): Incremental Intelligence?). Introduction to the Report credits the increased research capabilities of Indian pharmaceutical companies to the amended Patents Act, which allowed product patents in the pharmaceutical area and identifies Section 3(d) which prevents patenting of incremental pharmaceutical innovations as a major bottleneck for the further growth of Indian pharmaceutical companies and foreign direct investment in the Sector. It attacks the rationale behind the Section by pointing out that evergreening can be tackled better by the rigorous application of existing patentability requirements under Indian law rather than a blanket exclusion on all incremental pharmaceutical innovations. On the contrary the report asserts that allowing patents on incremental innovations can lead to decreases in costs and increased access to medicines.

The report goes on to point out with the aid of a study carried out by the National Knowledge Commission (which determined that while 37.3% of Indian companies introduced breakthrough innovations in recent years, no fewer than 76.4% introduced incremental innovations) that incremental innovations have been an important source of India's recent economic growth and the success of Indian pharmaceutical companies. The report extensively lists numerous incremental innovations and their importance with respect to increased effectiveness, extended usefulness and greater selectivity and longer lasting action highlighting their clinical benefits. It points out that this leads to social and economic benefits including increased resources for new drug discovery, reduced healthcare and other social costs, and increased drug price competition. The report points out that repealing of Section 3(d) will greatly benefit the domestic pharmaceutical industry and also increase access to drugs owing to; improved quality of drugs with emphasis on the Indian climate and diseases specific to India, development of R&D capacity of Indian pharmaceutical companies, reduction of healthcare costs and increased access to medicines as a result of price competition.

This is followed by the examination of the wording of the Section 3(d) and its legislative history. Section 3 of the Act enumerates the categories of non-patentable subject matter. Section provides that

“the mere discovery of a new form of a known substance which does not
result in the enhancement of the known efficacy of that substance or the
mere discovery of any new property or new use for a known substance or
of the mere use of a known process, machine or apparatus unless such known
process results in a new product or employs at least one new reactant.”

The Explanation to the Section provides that

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
significantly in properties with regard to efficacy;


The report points out that the statute fails to define the terms “significantly” and “efficacy”. The decision of the Madras High Court in the Novartis case has however laid down clearly that efficacy in Section 3(d) means therapeutic efficacy. It is noted that Section 3(d) was based on a provision of the European Union Directive relating to regulatory drug approval of drug products for human use, further supporting the view that “efficacy” means therapeutic efficacy. The report highlights the unreasonableness of the burden placed on the applicant who has to produce data demonstrating the therapeutic efficacy of the new form or use. The data can be produced only after conducting clinical investigations which are normally conducted much later in the drug development process. By referring to the difficulty faced especially by Indian pharmaceutical companies the report concludes that Section 3(d) leads to decreased likelihood that Indian companies will develop products to meet the needs of the domestic market. This conclusion by the Report is based on the assumption that Indian pharmaceutical companies greatly rely on the domestic market to incentivise their Research and Development.

The report then looks at Section 3(d) in an international context and begins by pointing out that India is the only country to categorically exclude all new uses and forms of known pharmaceutical substances from patentable subject matter. It is illustrated with the help of the experiences of China, Italy and Japan that intellectual property harmonisation can contribute significantly to economic growth. The report also goes to the extent of alleging that the Act's exclusion of incremental innovation from patentable subject matter appears prima facie to be in conflict with the international consensus reflected in the TRIPS Agreement that all innovations, regardless of field of technology, should be accorded equal protection and encouragement under national patent laws.

The report makes its case for the reforming of the Patents Act to realise the benefits of incremental innovation by noting that the Organisation of Pharmaceutical Producers of India stated to the Mashelkar Committee that excluding incremental pharmaceutical innovations from patent protection would have significant negative consequences for both domestic and foreign investors. The suggestions for reform are justified by pointing out that; incremental innovations involve considerable innovation and inventive effort, non-obviousness is a criterion of patentability and not eligibility and in US to prove prima facie obviousness based on structural similarity between two chemical compounds it is necessary to show some motivation that would have led one of ordinary skill in the art to select and then to modify the original known compound to achieve the claimed compound (no such showing is required under Indian law). The report alleges that Section 3(d) bars inventions that may otherwise meet the requirements of patentability and thus are really inventive. As a middle ground the report suggests the inclusion of persons having backgrounds in pharmacology in the examination process to aid in better examination of increased efficacy. It however concludes by pointing out that to reap the complete benefits of pharmaceutical innovations, Section 3(d) needs to be removed from the Act altogether. The report strongly advocates the perspective of pharmaceutical companies which is to repeal Section 3(d).

One must also note the other perspective as pointed out in the article titled The “Efficacy” of Indian Patent Law: Ironing out the Creases in Section 3(d). In light of the poorly equipped and understaffed patent office of India it is important to have a provision like 3(d) aimed at filtering out certain inventions in the initial stages. However the poorly drafted Section 3(d) has given rise to undesirable uncertainties. The article thus proposes a legislative amendment to Section 3(d) as follows:

3. What are not inventions: The following are not inventions
within the meaning of this Act....
d) a new form of a known substance, unless it differs significantly in
properties with regard to efficacy, when compared with the known
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 structurally similar forms
of a known substance shall be deemed to constitute “new forms of a
known substance.”

For the purposes of this clause, a “known substance,” against which
the efficacy of a “new form” ought to be compared, shall be taken to
be a substance which is not “new,” in that it does not satisfy the
“novelty” criterion for patentability. For the purposes of establishing
that a “new form” differs significantly in properties with regard
to efficacy, an applicant must provide data comparing the efficacy
of the new form with that of a “known” substance. Such data
need not prove this “difference” in property as a matter of statistical
certainty, nor does the applicant have to provide actual evidence of
trials in humans. Instead, the applicant has to demonstrate a
reasonable correlation between the efficacy claimed and the data
provided in support of this. Such reasonable evidence of the
correlation can be established by relying on, inter alia,
statistically relevant data documenting the activity of the new
form and/or known substance, documentary evidence (e.g.
articles in scientific journals), data generated using in vitro assays, or
from testing in an animal model, other preclinical test data or any
combination thereof.

For the purposes of this clause, a determination as to whether a
difference in property with regard to “efficacy” is “significant,” shall
be assessed with reference to the views of a person skilled in the
relevant art.”


The article concludes by pointing out that ironing out the creases in Section 3(d) will lend more certainty to the law and aid in its efficacious functioning. The urgency for this is emphasized by pointing out that there are several cases in the patent office that hinge on Section 3(d) and that there are several countries seeking to enact a similar provision.

Seeking Funding For Indian "Bayh Dole" and VIP Series

As many of you may be aware, I organised a series of intellectual property and innovation lectures last term at the National Univeristy of Juridical Sciences, Kolkata (NUJS). We've christened them as the VIP series (Venting Ideas on Intellectual Property). Some of the key speakers included:

1. Professor David Nimmer, one of the leading global copyright experts and revision author of the leading treatise "Nimmer on Copyright" spoke on the Google Copyright Disputes and their relevance to India.

2. Justice Arjan Sikri, a renowned judge of the Delhi High Court spoke on "Injunctions vs Damages in IP Cases"

3. Prof Avi Choudhuri, a reputed professor at McGill University on "Anti Counterfeiting: Techno-legal Solutions"

Most of the speakers were kind enough to travel at their own cost (or were otherwise sponsored)--and we were therefore able to rope them in and contribute to the generation of more IP related knowledge.

Many of you requested that these talks be webcast, recorded etc. I tried very hard to pursue University funding and funding from the government--but to no avail.

For those good samaritans out there who are willing to support such activities that aim to create more awareness around IP issues, would you please consider supporting these IP activities in some way? If you're willing to contribute something, please send me an email at shamnad[at]gmail.com.

Indian Bayh Dole Conference

We're also currently looking to do a conference around the Indian Bayh Dole Bill later this year. Listed below is the brief conference proposal and the issues that it seeks to tackle:

"In January 2009, the government introduced the "Protection and Utilisation of Public Funded Intellectual Property Bill, 2008" in the Rajya Sabha.

While the purported aim of this legislation (which is modelled on the lines of the Bayh Dole Act in the US) is to help stimulate more patenting and thereby technology transfer between university and industries is laudable, any such move should come with safeguards so as to optimally balance “public interest”. For one, patents created using tax payer money must be worked in the “public interest” and therefore must be subjected to greater safeguards than normal patents obtained by private entities. To this end, the government must ensure greater prospects of non-exclusive licensing of such inventions.

It bears noting that while the US Bayh Dole legislation has been praised by many, it has been subject to scathing criticism by others. This conference aims to bring together the evangelists of this legislation as also the critics with a view to determing which aspects to borrow and which to shed. The conference will also explore university industry knowledge transfer policies and their efficacy in detail."

If any of you are willing to support this conference, please let me know.

And lastly, if any of you are travelling to Kolkata and wish to be a part of our VIP (Venting Ideas on IP) series, please drop me an email. This might be an excellent platform for you to bounce off any deas on intellectual property that you might have, generate more debate and hope to promote better IP and innovation policies.

Thanks very much.

JIPR joins Open Access Club

SpicyIP is happy to note that since earlier last month, the Journal of Intellectual Property Rights (JIPR), has been freely accessible online. The Journal, which is India's main IPR Journal started in 1996, is currently available from 2002 to the present date, and can be browsed by Title, Author, Keywords or by Date. Further back issues are being worked on currently and will be uploaded in due time. The National Institute of Science Communication and Information Resources (NISCAIR), which is hosting the JIPR issues along with 14 other journals on its Online Periodicals Respository, has the following as its mission statement:

"To become the prime custodian of all information resources on current and traditional knowledge systems in science and technology in the country, and to promote communication in science to diverse constituents at all levels, using the most appropriate technologies".

The team at SpicyIP lauds this step at increasing accessibility to such academic and scholarly publications and it is hoped that this good work continues.

The journal is available at this link.

That Don’t Impress Me Much!!

The crocs don’t like it much but they aren’t saying anything. No, it’s not the budget…. Its just that the crocs in Kerala can’t be associated with Steve Irwin says his widow. Though Irwin was famous for his role in wildlife conservation, his wife isn’t too happy about the Kerala Wildlife Department dedicating its crocodile park at Neyyar, Thiruvananthapuram to him.

For a brief background, the Kerala Wildlife Department had named their crocodile park ‘Steve Irwin Crocodile Research and Rehabilitation Centre.’ As per news reports, Terri, Irwin’s widow, sent a legal notice to the Wildlife Department warning them against the dedication and resultant violation of intellectual property rights. Post the threat of legal action the park backed out and changed the name of the Rehab centre. The Chief Wildlife Warden, K.P. Ouseph, stated that, “We meant it as a token of our respect for him and his work as a naturalist and conservationist.”

So where does the problem arise? The issue falls in the ambit of celebrity rights/personality rights, which came about as an extension of intellectual property rights. The basic understanding of these rights is that an individual (normally a celebrity) has a right over his reputation and information connected to him. Any third party trying to benefit commercially from such reputation or information without due authorization is violating the concerned person’s personality rights.

A result of judicial innovation, personality rights are a mix of privacy and publicity rights with economic and moral aspects. In terms of publicity rights, the celebrity has the sole right to commercially use his personality. No third party can do economically benefit from the celebrity’s personality without due authorization (a form of misrepresentation). As far as moral aspects of this publicity right is concerned, unauthorized association with the celebrity which leads to harming the reputation of the celebrity (similar to the conception of loss of goodwill) or results in defamation would also amount to the violation of the celebrity’s rights. Basically, the privacy aspect illegalizes undue interference in the private life of the celebrity.

The term ‘right to publicity’ was coined by Justice Frank in the case Haelen Laboratories v. Topps Chewing Gum. In his decision, Justice Frank upheld the right of the baseball player to assign the publicity value of his photograph. This was one of the first cases that recognized the economic interest a celebrity had in his personality.

More recently, Julia Roberts took Russell Boyd before the WIPO Arbitration panel for cybersquatting and registering the domain name ‘JuliaRoberts.com’ in bad faith. The WIPO panel accepted that, even in absence of a registered trademark over her name ‘Julia Roberts’ was distinctive and carried a secondary meaning over which only the actress could claim a monopoly. Consequently, the domain name registered by Boyd was in bad faith and an attempt to wrongfully benefit from the celebrity’s fame and status.
(Refer to T. V. Kumari, “Celebrity Rights as a Form of Merchandise – Protection under the Intellectual Property Regime”, 9(2) JIPR 120 - 135)

Similarly, in Edmund Irvine Tidswell Limited v. Talksport Limited (2002), the United Kingdom High Court held that a celebrity could have a proprietary interest in his reputation and could protect the same from unlicensed appropriation. This case reflected a change in stance for the UK courts, which have historically been uncomfortable with the idea of image rights.

The diversion in the American and European legal frameworks in relation to personality rights is summarized by Daniel Biene. He states that, “… While the United States, the world’s largest producer and exporter of entertainment, recognizes a so-called right of publicity to allow the use of one's identity as an economic commodity, continental Europe’s legal tradition considers persona and business essentially incompatible.”
(Refer to D. Biene, “Celebrity Culture, Individuality and Right of Publicity as a European Legal Issue”, IIC 2005, 36(5), 505-524.)

Note should be taken that the publicity aspect of personality rights aims to protect the economic value of a reputation, in a manner similar to the protection of merchandise. Given this treatment, even though personality rights originated from intellectual property regime and the tort of passing off, presently in the United States the ‘publicity’ aspect of personality rights is dealt with as a measure of unfair competition.

As far as the privacy aspect of personality rights is concerned, this right does not allow the celebrities to completely control and censor information regarding them from reaching the public. There are limits to the control celebrities can exercise over information so as to prevent it from entering the public domain. For instance, in Campbell v. Vanessa Frisbee, the US court, citing an earlier decision, stated that those who seek and welcome publicity of every kind bearing upon their private life’s so long as it shows them in a favourable light are in no position to claim invasion of their privacy which shows them in an unfavourable light. Thus, one cannot control all kinds of information using the privacy claim; normally some economic harm or likelihood of the same has to be shown.

Hence, in case of privacy rights there is a fine balance that needs to be maintained between personal information and public interest in dissemination of information relating to celebrities. Mostly, this balance is maintained by determining whether the information about to be released or which has been released in relation to the celebrity is ‘newsworthy’, i.e., is there any public interest in the receipt of the information. Public interest is judged using the standard of a reasonable man. The line is drawn where such interest turns into morbid prying into someone’s personal life.
(Refer to T. V. Kumari, “Celebrity Rights as a Form of Merchandise – Protection under the Intellectual Property Regime”, 9(2) JIPR 120 - 135)

In India there isn’t any law as such on Personality Rights. However, law on different aspects of personality rights can be located in various legal fields. For instance, in the famous AutoShankar case the Supreme Court recognized that the right to privacy was a part of the fundamental right to life and the State could be held responsible if it violated the same. Moreover, the court also recognized that if the violation was by a private person then the unwarranted interference could be treated as a civil wrong and the right to privacy could be enforced through the law of torts.

Second, a defamation suit can be filed against a person who makes or publishes any imputation concerning any person [including a celebrity], knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, to defame that person. Defamation is both a civil wrong and criminal offence in India. However, it should be noted that truth published in public interest is a defense in any action of defamation. This is interesting since judgments cited earlier in this post clearly show that in several cases the courts are of the view that, since celebrities court the media the permissible intrusion levels in their lives should be higher and normally only instances of ‘morbid prying’ are to be prevented.

Lastly, a ‘passing-off’ action is available against any third party who causes injury to the business, goodwill or reputation of the plaintiff by misrepresenting and trying to ‘pass-off’ his goods or business as those of the plaintiff. Applying this framework, a passing-off action can be filed against a third party who attempts to create an untrue association between his product and a celebrity by making unauthorized representations that the concerned celebrity endorses the product. The concerned celebrity’s personality and/or goodwill can be treated as a ‘commodity’, and it can be argued that the wrongful association marketed by the defendant in the course of his trade to the consumers has resulted in loss of goodwill and reputation for the celebrity and has adversely affected his ‘brand value’.

Moving on, even in the absence of any law or decision on the point, there are instances where celebrities have tried to use the concept to protect their distinctiveness. For instance, prior to the release of his film “Baba” in 2003, Rajnikanth issued a legal notice prohibiting anyone from imitating his screen persona or using the character of “Baba” for commercial gain, including by way of advertisements and imitation by mimics or television. The legal notice was published in a number of leading Tamil and English dailies the legal notice also declared that no attempt be made to use Rajnikath’s photos or sketches or attire in the film such as the red scarves, pendants etc for the purpose of endorsing products. From this a conclusion can be drawn that the actor was attempting to protect his personality rights. (Refer to M. Verghese’s article on personality rights available here)

To my knowledge, the only relevant discussion on personality rights took place in the Delhi High Court decision,

ICC (Development) International Ltd v. Arvee Enterprises & Another, 2003 (26) PTC 245 (Del), where it was held that the right of publicity does not extend to events and is confined to persons. The passage of the judgment relevant for us is reproduced below:

“… The right of publicity has evolved from the right of privacy and can inhere only in an individual or in any indicia of an individual's personality like his name, personality trait, signature, voice, etc. An individual may acquire the right of publicity by virtue of his association with an event, sport, movie, etc. However, that right does not inhere in the event in question, that made the individual famous, nor in the corporation that has brought about the organization of the event. Any effort to take away the right of publicity from the individuals, to the organiser {non-human entity} of the event would be vocative of Articles 19 and 21 of the Constitution of India. No persona can be monopolised. The right of Publicity vests in an individual and he alone is entitled to profit from it. For example if any entity, was to use Kapil Dev or Sachin Tendulkar's name/persona/indicia in connection with the ‘World Cup’ without their authorisation, they would have a valid and enforceable cause of action….”

One can safely say that if the wording of this judgment is to be followed then the right of publicity and a celebrity’s control over the commercial use of his image under the realm of personality rights is recognized in India.

However, given the hazy state of law in the area, Safir Anand and Surbhi Mehta of Anand and Anand in their article “India: IP and affiliated issues in the sports arena” published by ManagingIP, gave the following tips to celebrities, especially sportspersons, to ensure protection of their legitimate interests:

• Ensuring written consents are signed in every sponsorship, marketing or endorsement situation, where there is clearly a commercial benefit to a third party,
• Making the consents specific with reference to the image, the permitted uses, the medium and the timeframe for use, and
• Expressly excluding in writing any images that are not to be made public or that are not used in certain ways.

Conclusion
Accounting for all this, I am still at a loss and I fail to understand Terri Irwin’s actions. I agree there is association, but it’s from dedication! The same is evident from statements made by concerned authorities and news reports. The attempt is pay respect (fair use?) and not one to make a buck out of wrongful and misleading association or by making claims of having memorabilia of Irwin or that Irwin visited the centre.

For entertainment value I am reproducing Steve Irwin’s plaque which was put up outside the park, also so that one can figure the degree of association.

My problem with this entire situation being that it seems pretty unreasonable to use laws which are meant to serve a completely different purpose to lash out at a well meaning tribute, given the plaque and related reports I fail to see how it could be interpreted as anything else.

Terri hold your horses or your crocs maybe!





(Available at
http://www.thehindu.com/2007/07/13/stories/2007071357660600.htm)

An example from our Chinese neighbours

One of the few business method patents that have been granted by the Chinese Patent Office, which is generally very cautious while allowing such patents, was recently invalidated by the Patents Re-examination Board after an invalidation request was filed by a local University. The patent was for 'Computer system for data management and method for operating said system' and was held by Citibank. It is interesting to note, that these proceedings were not filed by a rival company, but rather by the IP center of a Chinese University. The University, in June 2009, has apparently revealed that the patent is no longer valid. Though the proceedings were filed nearly 5 years after it was granted back in 2003, it is laudable that the matter came up for hearing within 4 months of the filing, and was subsequently revoked.

Backtracking slightly, a business method patent can loosely be defined as a patent aimed at performing a commercial purpose by means of digital networks. Business method patents critics have been very critical of these patents claiming that these patent don't cover physical inventions/innovations, but rather deal with more abstract concepts and mathematical algorithms.

The global position on business method patents is a little dicey. While certain countries such as USA, Japan, Australia, Singapore, etc seem to favour it (last month the US Supreme Court said it would review the Bilski position as to whether business method patents should be allowed or not), other countries such as India, China and most of Europe tend not to allow such patents.

Looking at the case in hand, Chinese patent law doesn't prohibit business method patents. In fact, Part II, Chapter 9 of the SIPO's Guidelines for Patent Examination expressly provides for computer software related inventions that possess "technicality". However, as mentioned, the Chinese Patent Office has been seen to take an extremely cautious approach to granting these patents, and as such, very few business method patents have been granted so far in China. Two of the few that have been granted have been to Citibank. The patent for the 'Electronic Monetary System' was granted in December 2002 (and was subsequently lapsed) and the currently revoked patent for 'Computer system for data management and method for operating said system' was granted in January 2003.

As per this site, the hearing, which was held in April, 2009, proceeded without Citibank being represented at the hearing and no reasons were published for the decision. Though the decision is not surprising, the reasoning of the decision needs to be published so as to maintain a standard of transparency in proceedings. That Citibank chose not to appear may indicate that it has decided to abandon the patent. However, that aside, this development is important due to the fact that it shows a growing awareness of IP rights and the framework surrounding it, as well as the legal tools available by the society. It also lays down the path for future actions along the same lines.

This case and the decision are also in line with the view, as Spicy IP has opined earlier, that is required by our own patent system. A plain reading of section 3(k) of the Indian Patents Act prohibits 'business methods' from patentability, as well as excludes 'computer programs' per se and algorithms from patentability. However, as pointed out by Mr. Shamnad Basheer earlier, (in the post as well as the comments section) this has not stopped several bad patents from slipping through the fingers of the Patent Office.

While some say that it is the carelessness of Patent Agents which is leading to these bad patents, the fact remains that even with the most careful of Agents, there is still a chance that some bad patents will slip through. Therefore, there is also a responsibility on Indian civil society , NGOs and other groups/institutions to take a lead from this Chinese example, to pool in resources and keep an eye out for such bad patents so as to ensure the continued improvement and development of our patent system.

SpicyIP Tidbit: Birmingham wants a GI for Balti

The Birmingham City Council, UK, is considering applying for a GI for "Balti" dishes that they claim originated in that part of the world, according to this and this news item from the BBC.

Balti, yes, as in bucket in Hindi/Hindustani/other languages, according to the Council website "is actually a round bottomed wok with side handles, originally used by the people in the Baltistan region of Pakistan". (Er... "kadhai" anyone?). The BBC report adds that Balti is a type of curry cooked quickly over a high flame with fresh marinated meat and/or vegetables.

[Added Later: Baltistan, home to Nanga Parbat and bordering the simmering Autonomous Region of Xinjiang, falls in Pakistan-occupied Kashmir. See this map for details.]

According to a spokesperson quoted in the report, "The city is not only the birthplace of the dish, but also home to the UK's premier community of Balti restaurants and businesses - The Balti Triangle." [I instantly intend to shoot a petition to Ms Dikshit demanding that Delhi introduce a gol gappa circle in time for the Commonwealth Games 2010.]

According to the news report, other "distinctive" features of the Balti recipe are that for the last 10 minutes of cooking, the contents are cooked at high temperatures. They are also served "differently", and are eaten straight from the dish, rather than from plates, usually with naan bread to scoop up the meat and sauce.

Even the mighty BBC is not infallible, and reports that the "City could trademark Balti name". In the circumstances, I guess it may be too much to expect the Indian media to mend its ways.

At any rate, I thought it useful to inform you that the Birmingham City Council is on the lookout for the perfect balti recipe. If any of our readers know of folks in Birmingham who have the potential to become the city's entrant to the British Curry Awards 2009, please do drop by your neighbourhood market. You'll need to courier a Balti.

[SpicyIP would like to thank Adam Smith of the World Trademark Review for bringing this news to our notice.]

Thank you for making us #4 in the IP world!

After a two - phase assessment process spread over several months, IP Watchdog Gene Quinn has published his results of the top 50 patent blogs. We're delighted to inform you that SpicyIP ranks in at number 4 in the IP blog world, based on a calculation system that has taken into account links, website traffic and votes. The image on the left takes you to the website. For details on methodology and detailed ranking results, please visit here.

Spicy IP would like to thank Gene Quinn for having conducted this "meaningful" ranking process, and also congratulate him for an amazing performance in the rankings himself. IP Watchdog clocked in at number 2, close on the heels of Patently-O at number 1, and not far ahead of one of my own favourite blogs, IPKat at number 3. We'd also like to congratulate everyone else who's made it to the list, including several familiar names, notably Duncan Bucknell's IP Think Tank (number 12), IP Watch (number 6), and Intellectual Asset Management (number 22).

As ever, we are extremely indebted and grateful to you, our readers, for having brought us here, through your repeat visits, constructive criticism, and of course, your votes. :) Along the way, we've cracked some other milestones, including being in the top 2% of all websites, according to Alexa, and in the top 100,000 websites, according to Technorati.

We look forward to improving on this performance in the times to come. Throughout our journey with you, we remain committed towards fair, objective and accurate reportage and analysis of IP issues, with the goal of helping India's IP policy develop in a healthy and transparent manner.