Ex Parte Ad Interim Injunction Granted by Delhi HC Against Aprica Pharma on Sitagliptin

In an ex parte ad interim injunction order issued on June 17, 2013 in suit instituted by Merck against Aprica Pharma with respect to Sitagliptin (IN209816), the Delhi High Court has restrained Aprica from “selling, distributing,  advertising, exporting, offering for sale and in any other manner, directly or indirectly, dealing in any product that infringes the subject matter of the” patent.

The next date in the matter is August 13, 2013.

Earlier in April, we had reported the denial of interim injunction with respect to the same drug against Glenmark, in which an appeal is pending before Justice Ravindra Bhat. We will keep the readers posted on the developments in the Suits and appeal.

I thank a dear friend for sharing this development with me.

Snippet: Dr.Reddy’s Sued for Patent Infringement in the US by AbbVie Inc

According to several news reports, Dr.Reddy’s Labs (DRL) has been sued by AbbVie Inc. and Wisconsin Alumni Research Foundation in the US District Court of Delaware for infringement of three patents on the drug Zemplar (Paricalcitol) and its injectable forms. The drug is used to treat secondary hyper-parathyroidism associated with chronic renal failure.

In May 2013, DRL informed AbbVie of the filing of its Abbreviated New Drug Application (ANDA) for injectable forms of Zemplar. In the same letter, DRL also stated, inter alia, its opinion that the three patents were invalid. Predictably, AbbVie has taken the position that filing of the ANDA application prior to the expiry of the three patents is an act of infringement.

We will keep our readers posted on the developments in this Hatch-Waxman litigation.

Off-Topic: The Psychology of Attribution

I tried thinking of examples of professions in this day and age where one can safely and practically say that one is competing only with the self, but I honestly can’t think of any mainstream vocation where one could make this claim without sounding clichéd and impractical.

Despite the overwhelming explosion of information about every profession, the irony is that quite a few of us continue to live in the bubble that cut-throat competition is the sole propriety of only the professions we practice. But that’s just the grass seeming greener on the other side.

Competition is here to stay in most fields until we evolve a more sophisticated and collective model of growth. Until that Utopian evolution happens, all we can do is to insist on rigorous adherence to certain first principles to ensure that trust, mutual respect and civility continue to be valued and observed in inter-personal dealings at the workplace.

Among those first principles, the one which needs to be ruthlessly insisted upon and enforced, considering that it is most susceptible to the pulls and tugs of competition, is “attribution”. Philosophical justifications aside, “attribution” is practically critical for team work and effective leadership.

Instead of highlighting the positives of attribution, it would probably help more to know the downsides in failing to give someone her or his due. When a team leader or a colleague fails to attribute someone for his contribution, it slowly leads to resentment, and gives the impression that the leader or the colleague is insecure about sharing credit with his team members.

Resentment in turn leads to progressive levels of dissent because trust in and respect for the leader or the colleague have suffered erosion. After a point, the leader is bound to encounter frequent insubordination, and if he is perceptive enough, is bound to sense a discernible lack of interest in his team members to contribute to the growth of the workplace.

The probable reason why failure to attribute has flammable consequences is that it provides ample fodder to a person’s sense of being a victim, and self-pity is known to be a self-feeding animal. The problem with self-pity is that a person in the grip of this mindset is rarely alive to his or her faults, for he has firmly entrenched himself in an impregnable cocoon of righteous indignation. Needless to say, all this certainly cannot lead to a conducive and productive atmosphere at the workplace.

Attribution facilitates greater co-operation between team members and the leadership even in relatively selfless professions. Someone I know is in the Indian armed forces, and has probably one of the finest service records, which is strewn with acts of bravery. He told me that more than patriotism, it is a fierce sense of loyalty to one’s Commanding Officer which is largely responsible for several acts of unquestioned obedience and bravery during battle. I was told that it is not just the Commanding Officer’s abilities which inspire loyalty, but also the belief that individual acts of bravery of soldiers would not go unnoticed by the CO. This is important because it is the CO who recommends his soldiers for awards of bravery.

This example is not meant to undermine the importance of patriotism, but incentive does play a key role even in the Armed Forces where most of us would typically expect a soldier to be an epitome of selflessness.

Since attribution and incentive are so deeply connected, the former is indispensable to ensure fairness in distribution of incentives. What is pertinent is that the need for rigorous attribution applies all the more if the workplace is in the business of innovation. Enterprises which are in the business of innovation would do particularly well to have specific and sensitive mechanisms in place to recognize individual contributions. Such recognition, contrary to what one might expect, does not undermine the positives of team work. Instead, it forces people to be careful enough to not accept undue credit, which goes a long way in nurturing mutual respect for each others’ talents.

The bottom line is, attribution, which is at the heart of IP jurisprudence, is the hallmark of integrity, and workplaces which fail to recognize this are bound to implode.  

Legality of Pay-For-Delay Settlement Agreements

The intersection of intellectual property law with competition law is something we're fairly familiar with. While the former seeks to grant exclusionary rights, the latter strives to uphold the statutory edict against monopoly. This is yet another area of law where the two clash head-on. 

Pay-for-delay settlement agreements are a type of patent dispute settlement agreement where a sum of money is paid by the originator pharmaceutical company (the patentee) to the generic manufacturer to stay away from the market for a specific period of time. Sai Deepak has recently blogged on the issue here.

This practice of delaying market entry of generic drugs has been called into question both in Europe and in the US. In 2008, the European Commission conducted an investigation focussing on the competition law aspects of such contractual arrangements which seek to keep players off the market, thus having a potential impact on competition. 

In the US, in a judgment delivered just hours ago, the Supreme Court sought to settle the 'circuit-split' regarding the legality of such agreements. While the Eleventh circuit preferred what is called the 'scope-of-the-patent' rule, the Third Circuit favored what it terms as the 'quick-look' approach. 

The scope-of-the-patent rule deems 'pay-for-delay' agreements lawful so long as they do not go beyond the temporal or substantive limitations of the patent grant or the unless the underlying patent litigation is a sham. To put it succinctly, the Eleventh Circuit held such reverse payments to be lawful so long as their anticompetitive effects fall within the scope of the exclusionary potential of the patent. The Third Circuit, on the other hand held that such agreements should be subject to a 'quick-look-of-reason-analysis' and states that any such payments made by a patentee to a generic manufacturer to delay the latter's entry into the market is per se unlawful as it amount to an unreasonable restraint of trade. 

In the present case of Federal Trade Commission v. Actavis, the FTC challenged the Eleventh Circuit's ruling arguing that the scope-of-the-patent rule is a 'paradigmatic antitrust violation' that results in increased prescription costs of customers. Instead, it chose to endorse the quick-look rule, comparing reverse payments to price-fixing. 

As a counter, the respondents argued that reverse payments are not per se anticompetitive and can be seen in the same light as agreements wherein infringers bargain for lower royalty rates in return for delayed entry into the market. 

The Supreme Court, today, rejected the quick-look approach argued for by the FTC by a 5 to 3 vote and held that reverse agreements are not presumptively unlawful. It ruled in favor of the 'rule of reason' and left it to lower courts to decide upon whether advantages of the settlement outweighs the harm caused to consumers. 

In my opinion, even if one is to view it from a competition law angle, it is better to have a late entrant into the market than not have one at all. The delayed entry in no case goes beyond the life of the patent. The FTC's approach seems to take it for granted that the generic manufacturer would win the lawsuit, had there been one. If one is to assume the opposite, an agreement of this sort is bound to benefit consumers in the long run as opposed to risking the generic manufacturer from being ousted by a court's decision. 

If one can resist the temptation to argue on the merits of these approaches, logically speaking, there is no way one can determine in whose favor the balance would have tilted if a lawsuit had ensued. And thus, there is no way to determine whether the agreement is anticompetitive or not, with certainty. 

To reiterate what Sai Deepak has said, there have been no reported instances of pay-for-delay agreements in India making it difficult to gauge whether they would be legal here. It sure will be worth the wait to see how the Competition Commission would decide if such a case were to come up. 

Isolated DNA not patentable subject matter, says the US Supreme Court.

Keeping up with the recent trend of path breaking decisions, the Supreme Court of the United States, four days ago, in a unanimous ruling in Association for Molecular Pathology v. Myriad Genetics held that DNA is not patentable in the United States any longer. 

The issues before the Court were as follows:

1. Do DNA sequences amount to patentable subject matter?

2. If not, are cDNA (Complementary DNA) excluded too?

As regards the first question, the court unanimously held that DNA sequences, being products of nature cannot be granted patents. Myriad, in this case, did not create anything new but merely extracted existing genetic material found in human blood. The genetic information in the BRCA1 and the BRCA2 genes were neither created nor altered, the court added. 

The court also held that HAD Myriad created synthetic genetic material, it would have obtained a patent, for the simple fact that those do not exist in nature, thus answering the second question. (cDNA is nothing but synthesized DNA from a messenger RNA template). cDNA, by virtue of having a chemical composition distinct from that of naturally occurring genes, is thus entitled to patent protection. 

This decision overrules the landmark judgment in the Diamond v. Chakravarthy case which had upheld patentability of human genes. It is important to now note that the court, however clarified that the instant case does not include method claims, patents on new applications of knowledge about the genes or the patentability of DNA sequences in which the order of naturally occurring nucleotides has been altered. 

In most patent systems including the US, EPC and India, abstract ideas are not patentable as they are not regarded as being inventions in themselves. Laws of nature, comparable to abstract ideas are thus not patentable, either. What is patentable is a method of practical application of the abstract idea. 

In the Myriad judgment, the court, in my opinion has failed to differentiate between two vital things- That patenting an idea is not the same as patenting something that embodies that idea. In this case, Myriad's contribution was the knowledge of the function of the BRCA1 and BRCA2 genes and its 

claims were constructed similarly- they focussed on the genetic information contained in the said genes and not on their chemical composition. 

Therefore, Myriad's claim, in effect, related to these genes embodying this information. If seen this way, the court's only objection seems to have been with the claim- The claim to the information in the genes alone. Had Myriad constructed its claim in such a way that it clarified it sought to patent the information as embodied in the molecule, the court would have perhaps granted the patent. 

By this, the court has only erred by being ambiguous. If indeed, as the court clarifies in the end, new applications of knowledge about the genes are patentable, if it is possible to enumerate all applications of knowledge about the genes in the claim, would it effectively not be the same as seeking a patent for the genes themselves? 

Pay-For-Delay Does not Pay: EU Imposes Penalties on Ranbaxy and Eight Other Pharma Companies

A few hours ago, it was reported that the EU’s competition law regulator has decided to impose penalties on Ranbaxy and eight other pharma companies for indulging in “pay-for-delay” deals, which resulted in delayed introduction of generic drugs in the market, and denied access to affordable drugs to patients. This is the culmination of an inquiry that was launched in 2009 by the anti-trust regulator of EU.

Pay-for-delay deals usually form part of the settlement of patent infringement litigation between pharma companies. In contrast to ever-greening by patenting (which is covered and forbidden under Section 3(d) of the Indian Patents Act), pay-for-delay involves a concerted action on the part of the patentee and a generic company to deliberately delay the release of the generic version of a patented drug, which gives an extended market breather to the patentee. Instances such as these typically fall within the realm of Competition law, which could involve cartelization as well as abuse of dominance.   

According to a study undertaken by the US Federal Trade Commission, pay-for-delay deals burn a hole worth US3.5 billion in the taxpayers’ pockets. Earlier this year, the US government released a document titled “Reducing the Deficit in a Smart and Balanced Way”, wherein it was observed that banning pay-for-delay deals could save the US government USD 11 billion in federal health programs.

So far, to the best of my knowledge, there have been no reported instances of pay-for-delay deals between pharma players in India. If at all there is a settlement reached between warring parties in on-going pharma patent infringement suits, it would be interesting to see the reaction of the Competition Commission of India.