“Nothing wrong with setting high standards of patentability”

On April 1, 2013, the Supreme Court of India upheld the decision of the Intellectual Property Appellate Board to deny patent protection to the beta crystalline form of imatinib, the compound marketed by pharmaceutical giant Novartis as Glivec, a popular drug for fighting certain forms of cancer. In the Supreme Court’s judgment, the modification made to imatinib did not satisfy the standard of inventiveness required under Indian patent law. Srividhya Ragavan, a Professor of Law at the University of Oklahoma College of Law, spoke with us in this context about the standards of inventiveness required under various patent regimes.

Scroll below to read the edited transcript of Ms. Ragavan’s talk.

Imatinib was patented in the United States in 1993. In 1998, when India had the mailbox facility in its patent law because the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS”) required developing countries to institute a mailbox facility during the transition to the TRIPS standards, an application was made to patent the mesylate form, which is the form of imatinib treated with methane sulphonic acid. When India eventually transitioned to the new patent regime in 2005, the Indian Patent Office looked at the patent application for imatinib mesylate. At that time, the generic drug makers opposed the patent application as lacking the “efficacy” requirement, which is necessary under Section 3(d) of the Patents Act, 1970 after it was amended in 2005.

The inventive step

Section 3 of the Indian patent statute outlines exclusion from patentability. Anything that falls within Section 3 cannot be patented. “In the U.S., it would probably have been something called a threshold requirement. This basically means that you would look at the requirements of Section 3 first and then look at all other aspects of patentability, that is, novelty, utility, and non-obviousness. In India, we look at Section 3 almost always after looking at the non-obviousness step. We call it the ‘inventive step’ here and we look at it after we determine that the invention is useful, novel, and non-obvious.” Section 3(d) states that the discovery of a new form of a known substance cannot be patented unless it shows “increased efficacy”. A new form of a known substance could be anything from a salt form to an ester form or from a pure form to a metabolised form or a mixture of isomers, all of which are examples given in the statute itself. None of these can be patented unless it also results in increased efficacy. Now courts have basically said that the term “increased efficacy” means “increased therapeutic efficacy”. It is not enough that there is non-therapeutic efficacy, for instance, if the compound is more bio-solube. “The only exception is if it differs significantly in properties.”

In the Novartis application, after looking at the “inventive step” criteria, the court looked at whether imatinib mesylate exhibited increased therapeutic efficiency compared to imatinib itself. “That is the one point that most people miss. You don’t look at imatinib mesylate independently. You look at along with Novartis’ earlier invention, the free base of imatinib.” Ms. Ragavan highlighted two points made by the court — firstly, that proof as to whether there is increased therapeutic efficacy will be sought on strict and narrow standards, and secondly, that properties inherent to that form would not qualify for enhanced therapeutic efficacy. “So basically, if the new form is a salt form, you cannot say that it is more soluble in water. That won’t help. You have to show that the more soluble form has more curing or therapeutic properties compared to the earlier patent.” Considering this, the court said that it was not patentable, and with that, Novartis hit the wall. They tried arguing that Section 3 itself was not TRIPS compliant and the court did not agree to that.

Secondary patents — Pfizer and Schering

Finally, Ms. Ragavan said, we can say that India will not allow patents for what are known as “secondary patents” in the United States. In the United States, “secondary patents” are allowed under some circumstances, that is, if you can prove “enhanced utility” from the base compound. When “secondary patents” are questioned, the question, almost always, is whether it exhibits enhanced utility. In Pfizer v. Apotex, Pfizer, an originator company, sued Apotex for infringing a patent on the besylate form of amlodipine, which was used to treat hypertension and forms of angina. Apotex alleged that Pfizer’s own earlier patent on amlodipine anticipated the latter patent on the besylate form. The Federal Circuit agreed with the generic drug company and said that the besylate form lacked enhanced utility.

Schering v. Geneva is another case where the court held that the later patent was not patentable in view of Schering’s own earlier patent on its drug, claritin. These are some cases where the court has not allowed “secondary patenting”. In Schering however, the court said that if you can claim appropriately, then the United States is not per se opposed to patenting secondary material. As a jurisdiction therefore, the United States is not opposed to patenting secondary material. “India however, because of Section 3, is clearly opposed to the patenting of all kinds of secondary material. How does it make a difference? Secondary patents are usually obtained when there is a primary patent on a free base. In Novartis’ case, it was imatinib. Much later, after continuing research, a second patent is taken on another form of the free base. It is usually a mesylate form, a besylate form, a salt form — a variation of the free base. Because it is a variation, it takes some new properties that are particular to that form. If it is treated with methane sulphonic acid, it takes some properties from that acid, or if it is treated to get a salt form, it takes some salt properties. Nevertheless, the basic properties remain the same time. Now how does it help these companies to pack patents one above the other? When the patent on the free base expires, it allows the company to continue to hold the market using the secondary patent for much longer than the original intended form, a concept that we call “evergreening”.

The Schering case is interesting. The original patent was for a compound called loratidine. The second patent was for the metabolite created in the patient’s body when the drug reacts with the acids in the patient’s body. Once the original patent on loratidine expired, Geneva, which is the generic drug company, wanted to create a generic form. Schering argued that while Geneva can create a generic form of loratidine, because of the patent for the metabolite form, every time a patient ingests loratidine, an infringing compound would be produced inside the patient’s body, and therefore, Geneva would be contributing to an infringement. Geneva sued Schering and argued that the second patent was invalid in light of the earlier patent. The Federal Circuit Court agreed with the generic drug company and held that the later patent was invalid. This is the situation in the U.S., which allows secondary patents. The concept of ‘evergreening’ is an increasing concern because of the length of time that the patents are held by the originator companies. To some extent, I would say that in the U.S., it has caused what is called “reverse payment settlement”, where the originator company pays the generic drug company to not introduce the generic drug for five years after the payment has expired. This is an attempt to use the law of contract to extend their monopoly for longer than intended by the patent law. It is yet to be determined whether these agreements are valid.

Come to India. Get your gold standard biotech patent.

There have been two types of responses to the Supreme Court’s decision. One has been that the judgment and Section 3(d) are fantastic. India, known as the “pharmacist of the world” because of their generic drug capability, has taken the lead in looking at the Doha Declaration and ensuring its dominance in the generic drug field. “I look at it as, it is hard to get a biotech patent in India but if you do get one in India, it is gold standard. This means that you have crossed pretty much every threshold.” India is not the only country to have done this. Only fourteen per cent of the patents granted in the U.S. would be granted in Japan. There is nothing wrong with a country having a higher standard. Further, other developing countries can follow this, establish a higher threshold, and have provisions like Section 3(d). The biggest benefit of this is that you allow competition. Since imatinib besylate is not patented, generic drug companies can create different versions of the same drug and put that in the market, which means that you will get the drugs at a competitive price. That is one line of thinking.

Come to China. Get many patents.

The other line of thinking is that what India is doing is absolutely unacceptable. By keeping a higher threshold, they are not allowing companies that invest a lot in research and development to stack these patents. Companies that stack these patents are typically those that are ready to invest in research and development and therefore the Indian patent regime is not conducive to innovation. This theory basically equates the number of patents with innovation — the more patents there are, the more innovation there is. So if there are fewer patents, there is lesser innovation, which leads to less money spent on research and development, which leads to lesser foreign direct investment. The United States subscribes to this view and it is home to a lot of innovator companies. This is part of the reason why the Special 301 Report is so critical of India in general and the Novartis case in particular. “The people who criticise India’s stand on intellectual property tend to think that China is doing a better job, partly because China is the leader in the number of patent applications.” China has a subsidy for patent applications, which encourages people to apply for more and more patents. The number of patents granted is also much higher. Innovator drug companies are trying to shift at least a part of their operations to China because they feel that they can get enough patents and prevent copying. However, when you stack minor patents, for instance, a patent on imatinib, another patent on the besylate form, another patent on the mesylate form, and another on the salt form, it diminishes the value of each individual patent. “The wriggle room you get is very less. Once there is a separate patent on the besylate form, the original patent holder has rights only over the original imatinib because the besylate form is covered by another patent. It shrinks the area of each patent. By doing that, it improves competition.” The beautiful part about China and India now is that they are taking exactly the opposite roads to reach the same end goal, which is to improve competition. China too has a lot of competition in the pharmaceutical market. Obviously, this increases the price of basic research because the more you do research, the more you stumble upon patents that slow your research down, which increases costs for the consumer. Ms. Ragavan said that a lot of scholars now believe that the U.S. system should look at India instead of diluting itself by allowing many, many, minor patents.


(Aju John is part of the faculty at