Monday, February 10, 2014

US Trade Representative Hearing in February 2014: designate India a “Priority Foreign Country”?

SpicyIP notes:

In pursuance to its investigation into India’s trade, investment and industrial policies, the U.S. International Trade Commission (USITC) is holding a public hearing on February 13, 2014. Professor Srividhya Ragavan (University of Oklahoma College of Law), Brook Baker (Northeastern University School of Law), and Sean Flynn (American University Washington College of Law) submitted a statement to the USITC on issues pertaining to India’s patent regime.

The statement includes the text

Specifically, TRIPS Article 31 permits compulsory licenses for ANY reason, including the historically sanctioned grounds of insufficient working of an invention in the country. This flexibility was explicitly clarified in the 2001 Doha Declaration on the TRIPS Agreement and Public Health. Similarly, TRIPS leaves countries free to define patentability criteria, including to define what is not an invention. Along the same lines, each member of the WTO has the sovereign right to determine andestablish the threshold for the nonobviosuness/inventive-step requirement. Thus, India is within its rights to establish that the new forms or uses of existing and known molecules that do not significantly increase the therapeutic effectiveness of such substances are not entitled to patent protection.

Within the full body

Historically, India embraced process-patent-only protection in specified fields rather than product patent protection, particularly for food and pharmaceuticals, in order to prioritize domestic issues like access to medication and food security. India was not alone. In the period before TRIPS, nearly 50 countries exempted pharmaceuticals from product patent protection and an additional 10 exempted pharmaceuticals from process patents as well.5

The Indian Patent Act of 1970,6 (IP70) along with other mechanisms such as drug and industrial policies were all part of the repertoire of tools used by India to achieve its national priorities. In gist, the process patent regime of IP70 excluded protection of the end-product, but protected the method or the process of making the product. The process patent regime encouraged competitive innovation in the methods of making known products, thus, it enabled production of products patented elsewhere using different processes, incentivizing the development of more efficient production processes. The system’s encouragement for process innovation was the first step to establishing India’s generic drug industry, much like how Germany established its chemical process industries in the 1800s. Under IP70, the term of process protection over food, drug, and medical inventions was limited to five years.7 A license of right 8 authorized any person to manufacture a patented product, without having to seek the patentee’s approval. Inventions relating to food, chemicals, and pharmaceuticals, were automatically deemed to be endorsed with a license of right three years after the patent issues. Further, the government could, in the public interest, compulsorily license the patent if the invention was either not reasonably priced or not worked to satisfy the reasonable requirements of the public.

As to fulfilling TRIPS

India’s definition of novelty or “new invention” includes world-wide prior art which was was much broader than the requirement that prevailed in the United States under 35 U.S.C. § 102, under which any use of the application material within the United States (only) defeated novelty. Only in 2011 would the America Invents Act introduce the concept of worldwide novelty,9 even though this provision was heavily criticized as obstructing small-scale industries.
India’s inventive step requirement requires that the “feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.”10 This requirement for inventive step has been widely noted as being much more stringent than the nonobvious requirement in the United States, but 11 many countries have different, indeed stricter standards for inventive step than does the United States. In fact, the U.S.’s weak standard has been a significant causative factor for the degenerating quality of the patents in the U.S.
India has also adopted, within the framework of allowable pluralism under TRIPS, a stronger definition of industrial applicability than the United States. The United States’ weaker standard of utility has historically allowed the patenting of business methods and other more abstract innovations, unlike India and many other countries that either exclude such matters as unpatentable or consider them not to have industrial applicability. This is one of many permissible policy differences allowed under TRIPS. In this regard, it is also important to note that India has codified a number of exclusions to patentability that are similarly excluded by many other countries – abstract ideas, theories of science, plants and animals, etc., even where the same creations could subject to patent in the U.S. Perhaps the most important exclusion from patentability, discussed further below, is India’s Section 3(d).

The authors cited Pfizer v. Apotex

The logic of this interesting provision is along the exact lines of the opinion of the Court of Appeals for the Federal Circuit (CAFC) in the case of Pfizer v. Apotex involving the Pfizer’s patenting of the besylate form of amlodipine (salt form) which Apotex claimed was obvious in the light of Pfizer’s own patent on the base compound amlodipine.16 The CAFC, in agreeing with Apotex that the patent on the besylate form was invalid, highlighted the besylate form lacked the unexpected superior results from the base compound in order for the salt form to be patented.17 Indeed, the Manual for Patent Examination Procedure in section 716.02 and in 2144.09 specifically memorializes unexpected results as a test to demonstrate nonobviousness of structurally similar compounds like isomers and homologues.18 Thus, India’s standard is well within the lines of what has been allowed in the United States.

As to a higher standard

TRIPS does not require its member countries to be persuaded by the issue patents of other countries. The argument that several other countries agreed that Gleevec was patentable despite being a mere variation of an existing, previously patented chemical entity is inconsequential to India’s own patent determination. If a country chooses to adopt a higher bar for determining patentable subject matter and/or inventive step under TRIPS, it is well within the member’s rights to do so. Indeed, Japan has a record of allowing approximately 14% of patents that are granted in the United States.


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