April 2009 Archives

This post comes from my recent entry on the ipHandbook Blog. To read the post from the ipHandbook Blog click here.

As the World Health Organization has raised its pandemic alert for swine flu to "phase 5" the second highest level, meaning that it believes a global outbreak of the disease is imminent, the relationship between patent rights and access to essential medicines has elicited again. As per WHO the phase 5 alert means there is sustained human to human spread in at least two countries. It also signals that efforts to produce a vaccine will be ramped up.

As it turns out that there is no vaccine available as yet and Tamiflu (Oseltamivir), a drug patented by Gilead and exclusively licensed to Roche is considered as one of the best drugs available today to cater to this kind of flu. Even at the time of the bird flu, it was known that Tamiflu was not the optimal drug to cater to such viruses- but only that of all the possible alternatives, it was the best.

In India, Deputy Controller of Patents, in a decision on the 23rd of March 2009, struck down Gilead's patent application covering Oseltamavir compositions on the grounds of lack of inventive step, failure to comply with section 3(d) and failure to sufficiently disclose the invention claimed.

Since Gilead hasn't patented this drug in all countries and has recently lost the Indian patent battle over "Tamiflu" just about a month back, these governments may turn to generic manufacturers for a cheaper priced alternative. And even if a patent exists , if Roche can't meet the demands in terms of quantity and price some of these governments may decide to override the patent and grant compulsory licenses (treating it a case of national emergency) to enable cheaper alternatives.

It is interesting to note that the US does not have any compulsory licensing clauses within its patent regime that can be invoked. But there is a possible alternative that the situations can be worked into the 'takings clause' in 28 USC §1498 and perhaps the fifth amendment to the US constitution that contains 'eminent domain' principle. Under these principles, the government could use the patent without the permission of the patentee, subject only to payment of some reasonable compensation. The US had threatened to do something similar with Bayer's patent during the Anthrax crisis.

But the bigger issue that was pointed out by Dr. Anatole Krattiger in a recent discussion with me is that "Back then, with Bayer's Cipro, the US back-peddaled quickly so as not to undermine private patent rights. And now, most Western governments have stockpiled Tamiflu. But who will supply Tamiflu now to the low-income countries that have not had the currency reserves to stockpile Tamiflu?"

Further Reading:

1. Shamnad Basheer and Tahir Amin,Taming of the Flu: Working through the Tamiflu Patents in India , Journal of Intellectual Property Rights, Vol. 2, p. 113, March 2006
2. Jyothi Datta, Patient vs Patent debate: Move on Tamiflu to set the trend, The Hindu, Mumbai , 2nd November, 2005

I was recently informed by Prof. Karen Hersey that the homepage of CIP FORUM 2009 is up and some of the panels will touch on the open access topic (IA/IP Management in Global Projects and Safeguarding Openness and Innovation in Research).

CIP Forum 2009 will be held in the Swedish Convention Center in Gothenburg 6th-9th of September. Marshall Phelps, Corporate Vice President, Microsoft will be the Chairman of the event. Over 600 persons from around the world are planned to attend.

"CIP FORUM 2009 focuses on the Future of Innovation as an engine to drive wealth and welfare creation in the 21st century. Central to the discussion is the changing nature of innovation from an industrial to a knowledge-based process where the management of intellectual assets, property, and capital takes center stage. The event will explore new innovation paradigms such as Early Innovation and Open Innovation where development and collaboration are dependent on packaging knowledge as transactions of technology."

Read more on: http://www.cipforum.org

This post comes from our friends on the IP Handbook Blog. The post from Prof. Jorda looks into the reason as to why a Patent per se is not a Monopoly. To read the post from the IP Handbook Blog click here.

Cogent reasons why a Patent per se is not a Monopoly

1.         A monopoly is something in the public domain that the government takes from the public and gives to a person (like in the famous British case of the playing cards). An invention is something that did not exist before and was not in the public domain.  It is something novel, that upon publication of the patent (application) enriches the public domain with the knowledge of the invention, and upon expiration of the patent, enters into the public domain, free to be used by anyone.  A true antithesis!

2.         In other words, "How can you have a monopoly on something that's novel and, therefore, never existed in the market" (Don Banner).  Indeed!

3.         According to our patent legislation, a patent is "personal property", like any other personal property (35 U.S.C. § 261).  The term "monopoly is a nasty buzzword that appears absolutely nowhere in the patent statute." (Chief Judge Markey)

4.         According to the 1995 DOJ/FTC Antitrust Guidelines, patents are "comparable to any other form of property," are "not presumed to create market power" and licensing patents is "generally pro-competitive."  This marks a 180-degree turn in their policy.

5.         If anything, patents intensify competition; they can lead to many improvement patents as competitors are motivated to "invent around."  Patents are "potential antimonopoly agents." (Judge Rich)

6.         Even if a patent is misused and becomes temporarily unenforceable, it still is not a monopoly, unless there was market power.  Misuse can be purged and when dissipated, enforceability is restored.

7.         Patenting is a neutral act and a patent does not even grant a positive right to make, use and sell the patented invention but merely a negative right to prevent others from making, using and selling such an invention.

8.         The patent right or property is too severely restricted in terms of duration and scope and beset by three dozens of reasons for invalidity and unenforceability to be considered a monopoly.

9.         The Supreme Court also has dropped the old "monopoly" rhetoric, replacing it by "a recognition that the right to exclude in intellectual property is no different in principle from the right to exclude in physical property."  (Judge Easterbrook)

10.       There are almost always alternatives available to the public -- prior art alternatives, alternatives that are obvious and hence not patentable and alternatives provided by improvement inventions.

11.       A patent is not a guarantee that the patentee will ever earn anything from the right to exclude others.

12.       McCarthy's Desk Encyclopedia of Intellectual Property also asserts that "A Patent Is Not a 'Monopoly'" and decries that "Misuse of Term Persists."

Because of the extremely negative connotation of the term "patent monopoly" that inventors and innovators are reprehensible monopolists rather than great public benefactors (with deprecatory effect also on patent law and patent lawyers), better terminology to use is: patent property, patent grant, patent right, exclusivity or simply patent.  Also to be avoided as nonsensical: "artificial monopoly," "desirable monopoly," "government-sanctioned monopoly," "legal monopoly," "limited monopoly" or "temporary monopoly" or even "government-granted legal monopoly."

 Let's stamp out "unthinking monopolophobia" (Chief Judge Markey) and" slander of patents" (Robert Sherwood).

Karl Jorda

Editor-in-Chief of Patent Barista Stephen Albainy-Jenei is a patent attorney and Member of Frost Brown Todd. His post titled "Indian Biogenerics on an Upswing" can be reached on the Patent Barista here.

Indian Biogenerics on an Upswing

"India's pharmaceutical industry caters to about 30% of the world's generic requirements. Despite its tremendous volume, it has been facing difficult times recently, with the WHO stance on counterfeit drugs, as well as seizure of Indian generic shipments in the EU.

There is some good news now on the turf with the introduction of Bipartisan Biogenerics Consensus Bill: Promoting Innovation and Access to Life-Saving Medicine Act in US which shall open up the US markets to biogenerics. It is proposed by Rep. Henry A. Waxman who is also credited with an existing legislation on pharma generics to his name. (Hatch-Waxman Act) The Bill intends to authorize FDA to approve generic biotech drugs and provide a regulatory set up for the same. This would help Indian companies to launch their biological generics in US by 2010.

The patent protection for blockbuster first-generation biotherapeutics developed in the West has begun to expire, throwing them open for generic exploitation. While continued high demand, high prices, and applicability in previously untreatable conditions are behind the success of branded biologics, the absence of generic competition has meant that the growth has gone unchallenged.

The US Approach

While recognizing patient need for affordable drugs and the constant need to foster pharmaceutical innovation, the US authorities are keen to develop framework on timely resolution of patent disputes and market exclusivity provisions consistent with the Hatch-Waxman model. The highlight of the Bill remains the reduction in the exclusivity period to 5 years, with a possibility of extension to 3 more years in certain cases, which is 7-10 years at present. Global Pharmaceutical Association (GPhA), that represents the manufacturers and distributors of generic and active pharmaceuticals, says on its website:

"As our nation acts to strengthen our health care system, our priority must be to reduce costs while increasing access to quality care."

For firms looking to develop biosimilars, some 75 proteins and peptide therapeutics were recently identified in US as potential profitable targets for new products. And significantly, a substantial proportion of these were approved as NDAs, meaning thereby that they can be targeted by biosimilar firms.

Indian and Chinese Markets

The Indian and the Chinese drug regulatory systems have since long favoured domestic generic companies through less rigorous regulations for pharma approvals and clinical testing standards. Currently, insulin, interferon alpha, erythropoietin (EPO), monoclonal antibody (MAb) products and recombinant vaccines are the biosimilars manufactured by a number of domestic biotech companies including Biocon and Wockhardt, who are keen to sell them in US. Biocon's Insulin is slated to be the first biogeneric to hit US markets in 2011. The Indian government has also streamlined some of its drug application and review procedures in order to cash in on the opportunities.

The biotech industry has been investing heavily in the development of facilities as a result of strong tax incentives. The Indian biogeneric manufacturers are also upbeat about the new regulations that could provide guidelines on the manufacture and approvals, which have been missing so far. The sales that biologic agents command and the costs that they impose for payers combine to generate intense interest in the development of biogenerics.

The Challenges and Opportunities in India

The challenge now is to develop biogenerics at par with chemical counterparts. The infrastructure, academic network, technical confrontations and costs of making biogenerics are higher than for traditional chemically synthesized generics. The Department of Biotechnology is reported to spend around $200 million annually to develop biotech resources in the country, including the expansion and improvement of academic programs, the development of more and better infrastructure, the nurturing of biotech companies, and the improvement of technology transfer to businesses from universities and other noncommercial laboratories.

This is expected to bear fruits with the renewed focus on biogenerics- hailed as the future of medicine. At the same time, the biotech companies in India may look towards licensing development and marketing to western partners, as has been done by Biotech for its G-CSF biogeneric, ahead of its approvals.

With EU already having forayed into this arena and established a regulatory set up, the markets seem to be lucrative. The global market for biotech drugs grew by 18% last year and now exceeds $50 billion, which is 10% of the global pharmaceutical market at nearly three times the growth rate. The US Bill is expected to simplify regulatory hurdles as well as set up a pricing strategy that would ultimately be helpful for generic companies of both countries."