Author: Ashima Sarin, student at Maharaja Surajmal Institute, GGSIPU
Abstract
Patent protection serves as a major tool to promote pharmaceutical innovation, providing patent owners with the monopoly on their inventions for a finite period. On the other hand, there are fears associated with the filing of further patents on incremental improvements of existing medications, known as patent evergreening. While pharmaceutical companies believe in protecting any kind of innovation, the opponents say that this leads to the delaying of cheaper alternatives reaching the markets and extending monopolies without making any substantial improvement to treatments.
In this article, the issue of patent evergreening is discussed from the perspective of India. In order to do that, the Patents Act of 1970, the TRIPS Agreement, and landmark judgments are analyzed. The purpose of this article is to examine the Indian patent regime, especially Section 3(d) in the Patents Act, 1970, which protects innovation without restricting the availability of medicines.
Introduction
Researching, developing, testing and launching a new drug may take several years, lots of effort and money from the developers. Hence, the need for patent protection arises here as it gives the inventor an opportunity to earn money and continue working on improving other drugs. On the other hand, the laws regulating patenting have to be such that they would not unnecessarily limit people’s right to get access to the drugs that save lives.
The issue under discussion here is that of patent evergreening. Many pharmaceutical companies apply for new patents related to various modifications of already invented drugs when the patent on the initial drug approaches expiration. Although some of those innovations may really be important, others are considered nothing but an attempt to keep the patent alive without making any real contribution to medicine development.
In view of these conflicting considerations, India chose a unique strategy under the Patents Act, 1970 and specifically Section 3(d), according to which any improvement over a known substance cannot be patented unless it shows some improved efficacy in its therapeutic use. This definition of Section 3(d) has been largely influenced by the interpretation provided by the Supreme Court in the case of Indian patent law.
This paper will analyze the legal regime concerning patent evergreening in India and assess whether it succeeds in meeting the requirements of balancing IP protection with the constitutional objective of ensuring availability of affordable drugs.
Understanding Patent Evergreening
Patent evergreening is a practice where secondary patents are acquired on small changes to a patent that is already protecting a product, hence, extending the duration of market exclusivity for a longer period than the initial patent’s lifespan. In the pharmaceutical industry, secondary patents can be obtained for a salt form, polymorphs, formulation, dosage or method of administration of an existing drug.
It should be noted that the term “patent evergreening” should not be confused with true innovations. All improvements to a drug are not necessarily innovations that deserve a patent. There are some improvements that can be done to improve safety, increase stability, minimize side effects or maximize efficacy, meeting all criteria to be patented. However, there is controversy if the changes bring minimal therapeutic advantages.
The advantages of secondary patents to a pharmaceutical company are the extension of market exclusivity and protection of investments in research. Public health organizations see that the justification of the secondary patents delays the availability of cheaper generic drugs.
It therefore becomes necessary to differentiate between true innovations deserving of protection and trivial modifications, which are nothing but ways of extending the period of monopoly. The patent law in India strives to make such a distinction on the basis of strict statutory guidelines, making patent evergreening one of the most controversial issues in intellectual property law.
The Evidence: Why Patent Evergreening Is Important
The controversy over patent evergreening is not just limited to legal theory because it has practical consequences regarding access to affordable medication. In cases where new patents are issued for changes that do not improve treatment in any way, generic drug makers can be barred from entering the market for several more years. Lack of competition tends to give the patent owners the power to keep their prices high, thereby denying access to essential medications to millions of people.
On the other hand, pharmaceutical corporations argue that improvements in formulation and/or mode of administration demand further investment and research. According to this argument, denial of protection of every single innovation can result in discouraging any further research and thus slow down the development of new and better medications. The problem here is how to determine what constitutes an advancement in the field of medicine and what serves only to secure business exclusivity.
This controversy was brought to the forefront with the Novartis case dealing with the cancer medication known as Glivec (Imatinib Mesylate). This controversy led to the clarification of the provisions of Section 3(d) of Patents Act 1970 by the Supreme Court of India and creation of one of the most significant Indian precedent on patenting of pharmaceuticals. The legal framework relevant to this issue is discussed below.
Indian Legal Framework Relating to Evergreening Patents
Indian patent laws attempt to strike a balance between achieving innovation and avoiding any unnecessary monopoly through patent laws that may inhibit access to cost effective medicine. Instead of banning secondary pharmaceutical patents outright, Indian laws set high criteria for obtaining such patents to avoid evergreening of pharmaceutical patents.
5.1 The Patents Act, 1970
The Patents Act, 1970 is the primary patent legislation in India. Section 2(1)(j) requires that an invention be novel, involve an element of invention, and must be capable of industrial application. Section 2(1)(ja) provides that the element of invention should show some development or economic significance and should not be obvious to a person having ordinary skill in the art.
Section 3(d), which is the most important part as far as pharmaceutical patents are concerned, states that discovery of a new form of a known substance shall not be regarded as an invention or patentable unless the new form results in an improvement to the known efficacy of the substance. Explanation to this section makes mention of derivatives including salts, esters, ethers, polymorphs, metabolites, pure forms, particle size, isomers, mixtures of isomers, complexes, combinations and any other derivatives of the substance in question and states that these are considered to be same substances except where there is a difference in efficacy related properties.
Section 3(d) was formulated in order to make sure that patents were only granted for genuine inventions and not for trivial improvements aimed at extending market exclusivity. Most importantly, section 3(d) is not against incremental innovations per se. Patents may still be obtained on demonstrating enhanced therapeutic efficacy.
Section 84 of the Act, which pertains to compulsory licensing, is another instance of India ensuring balance between private rights in relation to patents and public interests, even though it does not expressly prohibit patent evergreening. Under this section, there can be compulsory licenses under certain conditions, including when the requirements of the public are not satisfied or when the patented invention is not available at a reasonably affordable price.
5.2 TRIPS Agreement
India’s patent system functions in the context of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement). Article 27 of this agreement mandates members to provide patents for inventions that are new, involve an inventive step and are capable of industrial application.
Contrary to popular belief, the TRIPS Agreement is not obligated to allow its members to adopt evergreening patents. Rather, there is some level of flexibility accorded by the TRIPS Agreement to each member country regarding the application of patentability norms in its national laws. In India, this flexibility has been utilized by means of Section 3(d), which provides an extra safeguard from patents that are based on trivial modification of pharmaceutical substances.
5.3 Innovation versus Public Health
The legislative purpose of Section 3(d) is not one against patenting or innovation but rather an attempt to distinguish between pharmaceutical innovation and methods used to secure monopolies.
By demanding the demonstration of increased therapeutic efficacy, this legislative provision aims to promote innovation while avoiding the granting of patents in relation to alterations that do not bring any tangible benefits to the patient. This provision further serves India’s commitment towards affordable access to pharmaceuticals while maintaining research in the pharmaceutical industry.
5.4 Practical Significance
The Indian patent regime has far-reaching implications for all concerned parties. Innovation based firms have patent protection for new products, whereas generic companies have the benefit of knowing the expiration dates of patent protection periods. Above all, patients can reap the benefits of competition ensuing from the expiration date of a patent on their life saving medicine.
Judicial Interpretation
The jurisprudence of the provisions of Section 3(d) has been settled by the Supreme Court in Novartis AG v. Union of India (2013), the seminal case of evergreening of pharmaceutical patents in India.
The controversy related to the product known as Imatinib Mesylate, an anti-cancer medication available under the brand name Glivec. Novartis was applying for a patent of the beta crystalline form of Imatinib Mesylate, which was better than the existing chemical composition of the medicine.
Improvements on the properties of the compound, such as improved flowability or bioavailability, were not taken as indicators of improvement in therapeutic efficacy, which is what Section 3(d) requires. The Court, therefore, refused to accept the patent claim since Novartis did not prove an improvement in therapeutic efficacy of the drug.
Furthermore, the Court clarified that Section 3(d) was put in place in order to discourage patent evergreening while still ensuring the protection of valid inventions that conform to the requirements of the statute. The Court also dismissed the argument that the statute violated India’s commitment under the TRIPS Agreement.
Even if the compulsory licensing decision is in a totally different context, the case of the Bayer Corporation is another example showing that India takes a more general approach when it comes to patents and the balance between private property rights and public health issues.
Critical Analysis
The issue of patent evergreening finally boils down to one basic question, is it more important for the legislation to give priority to strong patent protection and promote pharmaceutical innovations or ensure accessibility of medicines? The patent system in India tries to strike a balance between these two interests and not favor any of them.
For the pharmaceutical innovators, patents are essential. Pharmaceutical innovations involve considerable costs and risks. Research and development of a new drug can take many years. Even some minor innovations like improvements in formulation and stability of drugs can be valuable. The patent system, which rejects all innovations, will definitely hamper further innovations in the pharmaceutical sector.
However, indiscriminate granting of secondary patents will result in pharmaceutical firms being able to secure market monopolies despite not having contributed any real improvement in therapy. Such measures will lead to delay in entry of generic drugs into the market, limit competition and thus increase the cost of essential drugs such that they will be unaffordable for most of the people. In a country such as India, where the availability of cheap healthcare is an important policy consideration, the monopolization of vital drugs may prove to have negative implications.
Section 3(d) is India’s answer to this problem. Rather than denying the existence of incremental innovation, it mandates that applicants should prove their claims about increased therapeutic efficacy in order to enjoy patent protection. The interpretation given by the Supreme Court in Novartis AG v. Union of India further clarifies the fact that only pharmaceutical innovations can get patented in India.
Conclusion
The issue of patent evergreening remains among the most contentious aspects in the domain of pharmaceutical intellectual property laws due to the fact that it sits on the crossroads of innovations, competition and public welfare. However, although it is imperative for patent law to protect inventions in order to encourage and reward innovation, it should not become an instrument for the creation of a monopoly devoid of any therapeutic benefits.
The unique system of laws is provided by India in its Patents Act, 1970 especially in Section 3(d) which calls for additional therapeutic efficacy in order for new forms of known substances to be patented. As confirmed in Novartis AG v. Union of India by the Supreme Court of India, the aforementioned section aims to differentiate true pharmaceutical innovation from any efforts of getting extended patent protection.
As far as I am concerned, the Indian patent law is able to provide a well balanced solution. It does not discourage innovation, however, it does not allow for patent evergreening either. Thus, inventions that contribute to the development of medicine receive appropriate protection, while the general public gets access to affordable medications.
FAQ’s
Q1. What is patent evergreening?
Patent evergreening involves filing for further patents on any changes made to an already patented substance, generally done in a bid to lengthen its monopoly.
Q2. What is the importance of Section 3(d) of the Patents Act of 1970?
Section 3(d) prevents patents from being granted to new forms of existing substances unless they show enhanced efficacy to prevent the granting of unnecessary extensions of monopoly over pharmaceutical substances.
Q3. Why is the case of Novartis AG v. Union of India important?
The case provided clarification to the concept of enhanced efficacy as used in Section 3(d) of the Patents Act of 1970.
Q4. Does Indian patent law discourage pharmaceutical innovation?
No, Indian patent laws protect inventions that fulfill all statutory requirements of invention and just limit those insignificant changes without therapeutic value.
