Tuesday, May 17, 2011

Snippets: Discussion on Utility Models Mooted

The Department of Industrial Policy and Promotion (DIPP) has in its 33-page discussion paper dated May 13, 2011, discussed the viability of introducing grant of patents for “utility models”. The objective is to examine the possible role of utility models as a system of incentives that spurs domestic innovation, although it may not match up to the standards of the Patents Act.

I will take up analysis of the paper in subsequent posts, but readers please note that the DIPP has invited comments and suggestions on Section X of the paper entitled ‘Issues for Resolution’ and any related issues, by June 30, 2011

Issues for Resolution
1. Does India need a Utility Model Law? 
2. What should be the scope of protection of such a law? Should it be restricted to mechanical devices?
3. What parameters should be adopted in the law with respect to   inventive threshold,   substantive examination, grace period, exhaustion, protection period   and registration procedure ? 
4. What novelty criteria  should be adopted? Should they be absolute or relative?  
5. What should be the nature of linkages between this law and the existing Patents Act? How do we ensure that the existing Patents Act, which is a bulwark against the ever greening of patents , remains undiluted ? 
6. What legislative route should be adopted? Should a  separate law to protect utility models be enacted ?  Or should the Patents Act be suitably amended ? Or should the Designs Act be amended? 
7. Should the facility for temporary protection of an invention  as a utility model pending grant of a patent be built into the legislation ? Should it be specifically mandated that only one form of protection would be available at any time?
8. Should applications for patents be transmutable to  utility model applications  and vice versa whenever the applicant so desires ? 
9. Should any specific provisions be introduced in  the proposed  utility model law to promote domestic filings as well as applications from SMEs? Can we use this model to protect some part of our traditional knowledge?
10. What enforcement procedure  should be put in place? What should be the dispute resolution mechanism? Who should be the adjudicating authority?
11.To obviate  monopolistic dominance, should the adjudicating authority be empowered  wherever public interest is involved, to award compensation/royalty in lieu of  restraining the infringement ?

Monday, May 16, 2011

Snippets: More Compulsory Licenses in the Offing?

According to news reports, Indian drug manufacturers may be open to actively seeking compulsory licenses for drug patents, particularly after the Central government seems to have voiced concerns over the fact that the mechanism hasn’t been employed as frequently as it ought to have been (only two entities NATCO and Cipla have filed applications for CLs actively).

Apparently, the Central government will consider applications for compulsory licenses on a “case-by-case basis”...does it have a choice? The Patents Act, 1970 clearly lays down the factors and facts that need to be considered in every application for a compulsory license, so it isn’t for the govt to choose if it wishes to decide every application for the license on a case-to-case basis; it is bound to do so by the Act.

Indian drug companies want the applications to be decided within a specified time frame so that there is some meaning left in pursuing these licenses.

As for MNCs, here's their reaction according to the Business Line:

At the multinational end of the spectrum though, the Organisation of Pharmaceutical Producers of India's President, Mr Ranjit Shahani, points out, that not having additional guidelines is positive. However, the Government was sending out “mixed signals” to the global pharmaceutical industry, through reports that it seeks to restrict automatic approval for FDI (foreign direct investment) in the pharmaceutical sector only to greenfield projects.
“What is needed is a ‘complete ecosystem ' which encourages investments by the innovative pharmaceutical industry. If industry is to strategically plan, then the way forward cannot be built on an uncertain foundation,” he added”
Let’s see how this pans out, because compulsory licenses bring in questions of working and pricing, which go to the root of the pharma patent debate in India.

Friday, May 13, 2011

Working of a Patent, Parallel Imports and Compulsory License: What is the Indian Position?

Over a series of posts in the last leg of 2010, I had discussed the import of Section 107A(b) of the Patents Act, 1970. To be honest, I don’t think the line of interpretation that I had explored is the only possible or sensible one, in fact it could well turn out that it’s way off the mark.

That said, the fundamental purpose of those posts was to subject the provision to rigorous analysis, instead of merely assuming that it speaks of international exhaustion. 

In this post, the idea is to continue with that line of enquiry, and use certain other provisions of the Act to try and support the interpretation I had advanced.

Before I proceed, let me pen down the gist of my earlier posts on Section 107A(b),  i.e. the provision could be referring to an alternative to international exhaustion. Section 107A(b) reads thus:

107A. Certain acts not to be considered as infringement- For the purposes of this Act-
(b) importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product,
Shall not be considered as an infringement of patent rights.

In my earlier series of posts, I took the view that Section 107A(b) requires due authorization, not for importation, but to produce and sell or distribute the patented product.

In other words, so long as the patented product is imported from a person who’s been “duly authorized under the law” to produce and sell or distribute, importation from such a person would not amount to infringement of the patent. Since the provision uses “duly authorized under the law”, I took the view that the provision probably does not refer to authorization under foreign law to produce and sell or distribute the product, because that would eviscerate the patentee’s rights under the Indian Act; the authorization to produce and sell or distribute must be under Indian law.

Stated otherwise, lawful production of the product outside India does not necessarily legitimize its import into India. Also, “duly authorized under the law” must be taken to mean specific authorization, as opposed to implied consent by way of international exhaustion. Not just that, the provision may not even be referring to international exhaustion because nowhere does it allude to first sale or exhaustion of rights post the first sale.

As I said, I may or may not be right, but that isn’t the issue. The issue is, have we considered the Act thoroughly enough to rule out this interpretation as a possible approach to the provision? Honestly, since I found the answer to be in the negative, I had to ramble over 5 posts to dissect the provision.

In this post, I will take up a combined reading of Sections 48, 83, 84(7)(e) and 107A(b) to further this line of enquiry. How do I intend to connect all these provisions meaningfully? I shall try and keep this as un-convoluted and lucid as I can. Here it goes:

1. Section 48, as popularly understood, does not grant to the patentee the right to practice his invention. It merely vests in him an exclusive exclusionary right i.e. to preclude third parties from doing any of those acts enumerated in Section 48, without his consent. For ease of reference, here’s Section 48:

48. Rights of Patentees: Subject to other provisions contained in this Act and the conditions specified in Section 47, a patent granted under this Act shall confer upon the patentee-
(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India;
(b) where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India.

2. That said, in order for a patentee to justify the grant of the right and to avoid attracting an application for compulsory license, the Act emphasizes on working/practicing the invention within the territory of India. Here’s Section 83:

83. General principles applicable to working of patented inventions- Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely:
(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;
(b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article;.......

3. If that be so, a patentee has to ensure that he doesn’t fall within the circumstances/situations spelt out in Section 84, including 84(7)(e). Here’s Section 84(7)(e):

84. Compulsory Licenses: .....
(7) For the purposes of this chapter, the reasonable requirements of the public shall be deemed not to have been satisfied-
(e) if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by-
(i) the patentee or persons claiming under him; or
(ii) persons directly or indirectly purchasing from him; or
(iii) other persons against whom the patentee is not taking or has not taken proceedings for infringement.

Let’s try and understand what exactly is covered under Section 84(7)(e). The gist of the provision is that a patentee would not be deemed to have fulfilled the reasonable requirements of the public under the Act, if the working of the invention on a commercial scale is prevented or hindered by importation of the patented article. But importation by who?

The importation could be by:
A. the patentee or persons claiming under him or
B. persons directly or indirectly purchasing from the patentee or
C. other persons against whom the patentee is not taking action for infringement.

This is the critical part of the discussion- the Section deems the patent to have not been worked reasonably if working of the patent in India is hindered or prevented by importation of the patented article under any of the above 3 circumstances.

What is to be noted is that these circumstances also include a situation where importation involves importation of the patented article by the patentee or persons claiming under him or persons directly or indirectly purchasing from the patentee.

This means if Sony Corp has a patent in India, and a person purchases the patented product in Pakistan from a licensee of Sony Corp and imports it into India, such importation could also hinder or prevent the patentee from fulfilling the reasonable requirements of the Indian public.

In effect, this provision requires the patentee to ensure that such importation does not affect his ability to meaningfully work/practice the invention by manufacturing it in India. Again simply put, if the Indian market is flooded by imported goods, albeit of the patentee, the parallel importation could make it unviable for a patentee to manufacture the goods in India.

Assuming that this train of logic is correct, it becomes a tad bit difficult to argue in the same breath that Section 107A(b) endorses international exhaustion. In other words, if the Act requires the patentee to ensure that he fulfils his working requirements and requires him to take action against any hindrance which arises on account of parallel imports, I don’t think it would be consistent to argue that the very same Act, speaks of international exhaustion in Section 107A(b).

I’ll mull over this proposition a bit more and come back with a few thoughts in another post.

Pharmaceutical Innovation: A Few Un-original Prelim Thoughts

A few evenings ago I had an impromptu discussion which turned into a debate, with me realizing at the end of it that I really knew very little about the inner workings of the pharma industry or the motivations which propel the pharma industry. 

The person I was discussing with is someone who‘s become a dear friend in a very short time and for whom I have the deepest of regards as a professional.

During the course of the discussion, I realized that certain arguments which those with academic proclivities are often tempted to employ, may not really cut ice in the real world. And this could be because in the real world, the dynamics of innovation are far removed from the romantic view that some of us are prone to taking.

One such romantic argument is “innovation must and inevitably happens for innovation’s sake”. Apparently, this isn’t the case, at least not now; this made me want to read up more on the issue. One article that I, as a greenhorn, found helpful in understanding the issue from both analytical and prescriptive points of view is “Pharmaceutical Patent Life-Cycle Management After KSR v. Teleflex”published in the Food and Drug Law Journal in 2008.

The author of the article, Dr.Michael Enzo Furrow, starts off with a sub-issue which I had briefly averred to in a post I had written way back in 2008, namely the innovator-generic balance. The author states that government intervention in the pharmaceutical market was primarily reactionary in nature i.e. the State was forced to step into the picture to prevent exploitation of customers on account of information asymmetry, and to ensure that safety of patients was not sacrificed at the altar of profits.

However, the elaborate framework that was subsequently put in place to ensure consumer safety resulted in increased costs for innovator companies, besides the fact that the commercial entry of the drug into the market too was delayed. 

Further, even if a drug of an innovator is protected by a patent, the elaborate procedure employed for validation of the drug by the drug regulatory authorities means that a good number of years in the term of the patent would not be available for commercial exploitation.

Given the various pulls and pushes that the pharma debate is subjected to owing to multiple interests acting on stakeholders with diverse, and at times antithetical motivations, it is but natural that pharma innovation jurisprudence has evolved into a complex, probably tortuous and sui generic animal which demands and deserves to be treated as a separate branch of study worthy of specialized and dedicated attention.

In the next few posts, I will discuss the literature and pepper it with my own thoughts wherever and whenever they are worth sharing.

Monday, May 2, 2011

Snippets:Trademark Office Issues Public Notice on Missing Files

Early last month, the High Court of Delhi had slammed the Trademark Registry for misplacing 44,404 trademark files. Pursuant to directions issued by Justice Muralidhar, the Registry has issued public notice asking applicants and proprietors of trademarks to submit self-attested copies of their trademark files before July 31, 2011 for “reconstitution” of the missing files. Simply put, since the office has lost these files, the copies submitted by the applicants and proprietors will be used as official records...

The branch-wise list of missing files is available here.