This article is written by Triveni Singal, pursuing a Certificate Course in Intellectual Property Law and Prosecution from LawSikho.

Introduction 

Social engineering theory, founded by Roscoe Pound, postulates the balancing of competing interests and forms the basis of the sociological school of jurisprudence. 

But what are the interests which are competing against each other?  

1. Individual or private interests- Demands/desires from the perspective of an individual, such as interests in property, privacy, freedom of will, etc. Patent rights are individual rights as they confer on the patentee the monopoly to commercially exploit his invention for 20 years to the exclusion of others. 
2. Public interests- Demands/desires from the perspective of a politically organized society, such as security, peace, public health, environment, equality.

The conflict between the public right (right to health and access to medical facilities) and the private right (patent rights) is very deep in the case of pharmaceutical patents. On one hand, the inventor desires a patent to have a monopoly over his invention, whereas on the other hand lays the public interest of a healthy society. It is thereby important to consider steps that act as checkpoints and thereby assist in stabilizing the right of the patentee to maintain equilibrium between these conflicting interests. 

Patent linkage: definition and legal basis 

A drug is manufactured in either of the following two ways- 

1. By a international/domestic multinational pharmaceutical drug company after the patent grant involving clinical trials, and all other research and developments procedures, or 
2. By generic drug makers (A generic drug has the same chemical substance as that of the original patented drug). 

Irrespective of the manufacturing method, each drug has to pass through a process of drug marketing approvals and receive the assent of the drug authority of the country before it gets introduced in the markets. 

Patent linkage is the system by which a country associates the drug marketing approval of a generic drug to the status of the patents corresponding to the original drug available. 

Unless consented by the patent owner, this system prohibits the grant of marketing approval of any generic drug before either the expiration of the patent term of the original drug or the determination by the competent authority that the patent will not be infringed/ it is invalid. 

Thus, it becomes crucial for the generic manufacturer to prove to the drug regulatory authority that its drug is not covered by a valid patent. If the same is not satisfactorily proved, the national regulatory authorities must prevent the registration and marketing of that generic drug. Thus, the regulatory authority is, in effect, transformed into a patent enforcement instrument. 

‘TRIPS Plus’ theory which covers the actions intended at elevating the magnitude of protection for right holders over and above those already provided in the TRIPS Agreement has introduced this concept. 

Article 28 under TRIPS Agreement enshrines the rights of a patentee regarding product patents which includes the right to prevent third parties from commercially exploiting the product without authorization by the patentee. Article 39 of the Agreement deals with protection of confidential information regarding the pharmaceutical or agro-based chemical products or drugs from unfair commercial utilization. 

The legal position regarding patent linkage is not uniform throughout all jurisdictions and varies greatly. A look at the other jurisdictions and their patent linkage system is a prerequisite to understanding the need for patent linkage in India.  

Position in US 

In the US, the patent linkage system has been statutorily provided under the Drug Price Competition and Patent Restoration Act, 1984 (Hatch-Waxman Act 1984). 

The primary intention of this legislation is to hasten the process of market access of generic drugs and at the same time providing stringent protection to the patent rights of pioneer drug manufacturers. 

The Food and Drug Administration (FDA) provides the marketing approval for pharmaceutical products in the US and maintains a book called “Approved Drug Products with Therapeutic Equivalence Evaluations” (also known as the “Orange Book”) containing, as the name suggests, the list of approved patented drug products having pharmaceutical and therapeutic equivalent analogs. 

They can not permit the marketing approval of any generic copy of a pharmaceutical drug that is protected by any patent mentioned in the Orange Book. 

Therefore, when a second applicant submits the application for a generic drug (called ANDA which stands for Abbreviated New Drug Application) it must include any one of the following certifications indicating that they have the necessary permission to employ the patents listed in the Orange Book concerning its generic drug- 

• That the drug has not been patented.
• That the patent has already expired.
• That the generic drug will not enter the market until the expiry of the term of protection of the original drug.
• That the patent is not infringed or it is invalid.

Thus, in the US the onus is pinned on the generic drug manufacturer to prove whether an existing patent applies on his drug. 

The system has proved beneficial in the following aspects- 

• Increased rights for drug companies to retrieve patent terms that have been reduced by clinical trials and regulatory hindrances. 
• Conditional registration of generic equivalents in the absence of patent claims.
• The strict data-exclusivity clause bars a generic drug manufacturer from using the original clinical data generated by the patent-holding company to gain market approval. Clinical trials require a big budget, and it is improbable that a generic manufacturer could conduct their own clinical trials and additionally sell their generic drugs at a reasonable price.

Position in India 

The Drugs and Cosmetics Act, 1940 (DCA) empowers the Drug Controller General of India the power to grant market approval to any drug. The Controller has to assure that the drug is harmless, non-toxic and proficient enough to enter the Indian market for consumption. 

Bristol-Myers Squibb Co. vs. Hetero Drugs Ltd (CS (OS) No. 2680/2008) (see here)

This case marked the beginning of patent linkage debates in India. 

The plaintiff had patented their drug, ‘Sprycel’, in India, which was recommended for chronic myeloid leukaemia. They had applied for an ex-parte injunction to preclude the Drug Controller from acceding to a generic version of their drug called ‘Dasatinib’ manufactured by the defendants. 

The court had put a stay on the defendant’s application seeking marketing approval for its drug.  

This judgment was condemned and considered malignant as it saddled the Drugs Controller with the added responsibility of regulating patent rights and determining its validity, which only the patent officer or the court should resolve.  

Bayer Corporation & Ors vs. Cipla, Union of India & Ors (2009 (41) PTC 634(Del)) (see here)

In this case, Cipla applied for a marketing license for its drug “Soranib” to the Drug Controller, following which Bayer filed a writ petition seeking a restraint on the grant of license to Cipla.

The apex court rejected the acceptance of patent linkage in India and declared it to be inadmissible citing the following reasons- 

• The powers and jurisdiction of the Drug Controller are guided by the provisions of the DCA and not by the Patents Act and, he is also not groomed to tackle issues pertaining to patent validity. 
• India is the member of TRIPS Agreement and is thus, under no obligation to accept the concept of patent linkage system which is a part of ‘TRIPS Plus’. 
• Patent linkage concept could not be read into the existing Indian legal provisions and thus, the courts cannot validate patent linkage system through any pronouncement.  

Bayer Corporation and Anr. v Union of India and Ors. (see here)

In this case, the court made the following important observations- 

1. Section 156 of the Indian Patents Act, 1970 does not inflict the government with the positive duty of enforcing and protecting a patent. It only thrusts a negative obligation on the government to not infringe the patent. 
2. When the Drug Controller grants marketing approval to any generic drug, he can not be deemed to be infringing or abetting the infringement of any existing patent. 
3. The objective of the DCA is only limited to the regulation of the import, manufacture, distribution, and sale of drugs and cosmetics. It does not extend to enforce a patent granted under the Patents Act and subsequently deny market approval to a generic version of a patented drug.
4. The generic drug manufacturer while applying for the grant of market approval has to satisfy the Drug Controller only that its drug is bio-available and bio-equivalent to the patented drug and nothing else. 
5. The question of preventing the Drug Controller to grant marketing approval for the generic version of the original patented drug during the first three years (until a compulsory license may get issued) is not envisaged in the DCA. 

The court also pointed out the following drawbacks which could arise if the patent linkage system was given recognition in India- 

1. The Drug Controller will have to necessarily reject the application of any generic drug manufacturer as long as the term of protection of the original patented drug does not elapse, which is contrary to the provisions of the DCA and the Patents Act. 
2. Instead of testing the validity of the patent, the Drug Controller will have to presume it. Then he will have to either completely refuse the marketing approval sought by the applicant or put the application ‘on hold’ till the applicant gets the question of the validity of the patent settled in proceedings before a competent authority. Such a procedure goes beyond the scope of the powers of the Drug Controller who is also not equipped to deal with problems concerning the validity of a patent.
3. The patentee would be able to obstruct all generic manufacturers who might have been able to make the drug available in the market at affordable prices. So, even if the patentee does not apply for marketing approval, the patented drug will remain virtually unavailable in India till the patentee decides otherwise.

Advantages and disadvantages of patent linkage 

Nations measure the importance of patent linkage for their country depending on their economic viability and access to medicines. 

Developed nations favour the concept of patent linkage and highlight its following benefits- 

• Reduction of wasteful and unnecessary patent infringement litigation. 
• More stringent protection of patentee’s rights.
• Promotion of innovation in the pharmaceutical sector.

In contrast, developing countries contend the following grounds- 

• Delayed arrival of affordable generic medicines in the market which will also have adverse effects on the public health of the country. 
• The Drugs Controller may not be well informed about the complex issues related to patent validity.
• The marketing approval only assesses whether the drug is safe to use and subsequently bestows upon it the right to carry on clinical trials so that it may enter the market as soon as the valid patent expires without any further delay. 
• The generic drug manufacturers will be forced to focus more on research and development as they will also want to invent drugs rather than produce alternatives of the original drugs, which will lead to a surge in the prices of generic drugs. 

Thus, it can be concluded that big pharmaceutical companies would favour countries that recognize patent linkage system in their jurisdiction as their target markets because- 

• Those countries would provide more severe protection to their patent drug, and 
• They would get the opportunity to commercially benefit from their drug even when its patent expires till the time the generic drug is introduced in the market. 

Conclusion

The concept of patent linkage is a double-edged sword. India is currently leading in the exportation of generic drugs to the world. We cannot bear to pay exorbitant prices for drugs, which are provided by generic companies for lesser amounts. As seen above, patent linkage incurs huge expenses to the consumers and governments that sponsor health care. 

Nonetheless, if adopted by India in the future with caution and with a balance between the public interest of health and private interest of the pharmaceutical industry it may also prove to be beneficial.  

References 

• https://www.lexorbis.com/wp-content/uploads/2015/10/Patent-Lawyer-as-published.pdf
• http://www.theglobalipcenter.com/wp-content/uploads/2017/03/full-report-E.pdf
• https://legaldesire.com/scope-patent-linkage-analysis/
• https://www.mondaq.com/india/patent/871208/patent-linkage-and-indian-laws#:~:text=India%20has%20not%20adopted%20Patent,originator%20drug%20is%20in%20force

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