The article has been written by Hemnaag I, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho. It has been edited by Ruchika Mohapatra (Associate, LawSikho).
It has been published by Rachit Garg.
Table of Contents
In the pharmaceutical industry, patents are being used and are one of the major forms of intellectual property rights (IPR). A patent makes sure that a new medicine is protected for a specific period, i.e., 20 years, and only the inventor is allowed to bring it to the market. As you can imagine, if everyone kept their ideas and results only for themselves and worked in secrecy, scientific progress would be much slower. Most importantly, a patent obligates the inventor to publish their invention so everyone can follow and learn from the new ideas. Still, sharing significant details about innovation comes with the huge risk of being copied. That’s why a patent also ensures that innovation is protected at least for a certain period. Once the term is completed, others are allowed to come up with their version of the product. This article will help you understand the specifications of drug patents in detail with reference to case laws as well as major amendments under the Patent Amendment Act, 2005 and other relevant provisions related to patenting of pharmaceuticals.
Meaning and characteristics of patents
The word “patent” is derived from the Latin term “patere”, which means “to lay open”, that is, to make available for public inspection. A monopoly or exclusive right that is granted over an invention to the patent holder. Patents are a form of contract that the inventor executes with the government of the country in which he agrees to disclose the entire invention, and in return, the government agrees to grant the inventor an exclusive right to stop others from using or making that invention.
However, not all inventions are patentable. The term “invention” is defined under section 2(1)(j) of the Patents Act, 1970, as “any new product or process involving an inventive step and capable of industrial application.” Such an invention is protected under patent law. A patent is a type of Intellectual Property Right (IPR) that protects the rights of the inventor from others who do not use or make the invention. The nature of patent rights is territorial rights.The Patent Law of 1856, The Patent and Design Act of 1911, The Patent Act of 1970 and Rules of 1972, and The Patent Amendment Act of 2005 comprise all the major legislations pertaining to patents. India being a signatory of the TRIPS agreement was under a contractual obligation to amend its Patents law to make it compliant with the provisions of the agreement.
The Patent Act’s objectives
-To grant a statutory right of the patent holder for a set period to prevent others from using, selling, or developing his invention and commercially exploiting it.
– To disclose the invention and practise that invention and make it work, thus encouraging scientific research and new technology.
– To stimulate new inventions of commercial utility and to pass inventions into the public domain after the expiry of the fixed period of the monopoly.
– To have sole ownership of the invention
– To ensure commercial returns to the inventor for the time and money spent on generating a new product.
Development of Patent Law in India
Pharmaceutical companies spend billions of dollars on development and research every year on new drugs. It is estimated that only 3-5 potential drugs reach clinical trials out of a thousand drugs, and only one gets approval for the market and marketing. The pharmaceutical companies patent the drugs they innovate and obtain exclusive marketing rights for 20 years. The cost of the development and research of the drug is recovered through the pricing of the drug, which is bought by the general public.
Once the drug invented by pharmaceutical companies is registered under the Patent Act, the company shall accrue a 20-year exclusive right to own the patent and the marketing rights of the drug shall also be exclusive during the term of 20 years. No other drug company is allowed to manufacture or produce the same drug. Once the period of 20 years is completed, the patent expires. In such an event, other drug companies are permitted to manufacture and sell the same drug.
According to the early 1970’s Indian Patent Act, only process patents were recognised, not product patents. This allowed Indian drug companies to manufacture the same drug-using another process that is also called reverse engineering. However, only after the 2005 amendment act, product patenting was allowed in India for pharmaceutical inventions.
Pharmaceutical patent types in India
The pharmaceutical industry is an intense “knowledge-driven” sector, where the inventors in this sector must be aware of patenting their inventions.
The various types of pharmaceutical patents are as follows:
Drug compound patents- The patents which claim a drug compound as per its chemical structure and are intended to provide the broadest protection, so they prevent other companies from preparing similar drugs.
Patents on formulations or compositions – A specific technology used to prepare a formulation or a number of its key ingredients.
Synergistic combination patents- The patent law of India states that the inventor can obtain protection for the new synergistic combinations of his drugs.
Technology Patent- It is related to the techniques used to resolve specific technology-based problems, which include an increase in solubility, stabilization, etc., and even the inventors can stop others from using the same approaches as they can claim the taste-masked formulation.
Polymorph Patents: The word “polymorph” refers to the different crystal structures of an already known compound, and these types of patents allow innovative firms to protect the improved versions of their original drugs.
Biotechnology patents- It involves the use of living organisms or biological materials in the preparation of pharmaceutical products.
Section 3(d)’s role in polymorth patenting patents
In India, the grant of polymorph patents is mainly governed under Section 13. The Indian Patent Office grants polymorph patent notwithstanding objections u/s. 3(d) of the Patents Act, 1970. Section 3 (d) states that “the mere discovery of a new form of a known substance does not result in the enhancement of the known efficacy of that substance; the mere discovery of any new property or new use for a known substance; or the mere use of a known process, machine, or apparatus unless such a known process results in a new product or employs at least one new reactant.”
Explanation: For this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of known substances shall be considered to be the same substance, unless they differ significantly in properties concerning efficacy;
Section 3 (d) aims to prevent the “evergreening of patents” by providing that only those pharmaceutical derivatives that demonstrate significantly enhanced “efficacy” can be patented. Section 3(d) also ensures that new forms can only be patented if they are truly meritorious and that patents will not be granted for trivial inventions.
Invention, as opposed to discovery, is finding out something that has not been found out by other people. There are many instances in various branches of science of independent investigators making the same discovery. That does not prevent the person who applies and gets a patent from having a good patent, for a patent represents a quid pro quo. The quid for the patentee is a monopoly, and the status quo is that he presents to the public the knowledge that they do not have. Patents are granted to things that are developed, made, or produced by human intervention.
Awarding of a patent to the inventor
Section 21 of the Indian Patent Act, 1970, constitutes the patent that is granted to an individual after they file a patent application. The inventor must ask the government by describing the invention in writing in order to get a patent, also known as a patent application. Only if there is no pre-granted opposition to the patent application will the patent be awarded. After being granted, the patent application can get a royalty from such inventions.
Transfer of patent rights
A transferable property can be transferred from the original patentee to any other person by assignment or by the operation of law. It can be licenced or assigned only by the owner of the patent, in which case co-owners or joint-owners can assign or licence the patent only with the consent of the other owner. The distinction between the two is that in a license, the person granting permission (i.e., the licensor) retains an interest in the property being licensed, while in an assignment, the assignor transfers his rights to the property being assigned. An assignment is a transfer of ownership and title while a licence is a contractual right to do something that would otherwise be an infringement of patent rights.
A patent assignment is an agreement where one entity (assignor) transfers all or part of its rights, title, and interest in a patent or application to another entity (assignee). Section 68 of the Indian Patents Act, 1970, provides for the mortgage, license, or creation of any interest in the patent. Section 68 also states that assignments, etc., are not valid unless in writing and duly executed. — An assignment of a patent or a share in a patent, a mortgage, licence, or the creation of any other interest in a patent is not valid unless it is in writing and the agreement between the parties is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and duly executed. There are three kinds of assignments, namely, legal assignments, equitable assignments, and mortgages.
Under section 70 of the act, the Patents Act allows a patentee to grant a licence by way of agreement. A patentee by way of granting a licence may permit a licence to make, use, or exercise the invention. A licence granted is not valid unless it is in writing. A licence is a contract signed by the licensor and the licensee in writing and the terms agreed upon by them include the payment of royalties at a rate mentioned for all articles made under the patent.
Licenses are of the following types:
- License granted voluntarily
- A Statutory License, also known as a Compulsory License, is a type of licence that is required by law.
- License, either exclusive or limited
- License, either express or implied
Important case laws
Bayer Corporation v. Union of India & Ors.
The case is related to the topic of compulsory license. Section 84 of the act states that after 3 years from the date of grant, a person can apply for a compulsory license. For getting a compulsory license, three conditions should be fulfilled: the reasonable requirements of the public have not been satisfied; the patented invention is not available to the public at a reasonable price, and the invention is not manufactured in India. The court held that medicine has to be made available to every patient at a reasonable cost, and the petitioner was required to pay a royalty to the patent holder under a compulsory license.
Dimminaco A.G. v. Controller of Patents Design
In the case of Dimminaco A.G. v. Controller of Patents Design, a vaccine was invented after examination under Section 12 of the Indian Patent Act, 1970. It was reported that the vaccine was not an invention under 2 (j). The court held that the process for the preparation of the vaccine was new, novel, and included inventive steps. If the end product is a new article, it is patentable.
Novartis Ag & Anr. v Natco Pharma Limited
In the case of Novartis Ag & Anr. v Natco Pharma Limited, since the post-grant opposition was not decided by the Intellectual Property Appellate Board (IPAB), the court held that though the patent rights may be crystallised once the opposition is decided, during the pendency of the post-grant opposition, the rights of a patentee subsist. Thus, confirming that Section 48 of the Patents Act grants rights in favour of a patentee which is not affected during the pendency of a post-grant opposition.
Indian patent law is a significant piece of patent legislation that aims to balance the interests of both the consumer and the inventor, and it is regarded as an exemplary piece of patent legislation. In the present era, the owners can file patent applications for a wide range of pharmaceutical products and processes. There are many different types of pharmaceutical patents, depending on the drug they are protecting. The exclusivity of each patent can be extended by various lengths as well because drug discovery, marketing etc. Before filing, the researchers must consider the criteria of patentability and then the types of patents that best suit their pharmaceutical products or processes.
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