Mail-box applications

The generic drug manufacturers would want to know whether they can, without fear of potential liability, continue to manufacture the generic versions of drugs for which patent applications have been made before January 1, 2005 under the `mail-box system', the processing of which will commence now.

In this context, the new Section 11A(7) introduced by the Ordinance is relevant. In substance, it provides that patent infringement proceedings can be instituted only after a patent has been granted.

It further provides that in respect of `mail-box' applications, patent rights shall accrue to a patentee only from the date of grant of the patents; there can thus be no liability by way of damages for any `infringement' before that date.

The effect of this provision is that a generic drug manufacturer will not incur any liability in respect of a product covered by a `mail-box' application until the actual date of grant of the patent in respect thereof.

Thus, so long as a patent for a `mail-box application' is not actually granted/sealed, the generic drug manufacturer can freely manufacture the drug without fear of liability for damages.

One other implication of the above provision is that the effective patent term of products covered by the `mail-box' application will be much less than 20 years.

This is because the patent term of 20 years starts from the date of the application, whereas the patent rights come into existence only after the grant of the patent, which may be some years after the application date.

One subtle issue may also be noted. Before the Ordinance came into force, and while `mail-box' applications were being accepted, Section 3 of the Patent Act provided that `new use for a known substance' was not a patentable subject matter. Hence, new pharmaceutical uses for a known substance were excluded from patentability.

However, the Ordinance amends Section 3 to provide that `mere new use for a known substance' would not be patentable.

The word `mere' restricts the scope of non-patentable subject matter and widens the scope of patentability.

Accordingly, `new pharmaceutical use for a known substance', though the substance itself is known and comprises part of the `state of the art', would still be patentable.

Thus the `new discovery' that the consumption of the known substance, aspirin, can also be useful in thinning the blood is patentable by making a claim for `use of aspirin in making a medicament for use in the prevention of blood clots.'

It is the opinion of the authors that for `mail-box' applications, patents should not be granted for new pharmaceutical uses for a known substance if the substance itself comprised part of the `state of the art' as of the date of application.

This is because on the date of such `mail-box' application (which is material for considering novelty and term of the patent, if granted) the same did not constitute patentable subject matter by virtue of the old Section 3 referred to above.

New applications

The patent regime suggests that novelty and `state-of-the-art' are to be determined as of the date of patent application.

Similarly, the patent term of 20 years commences from the date of the application. In respect of `mail-box' applications, rights and privileges conferred upon a patentee commence from the date of the grant of the patent.

However, in respect of pharmaceutical product patent applications made after January 1, 2005, such rights and privileges accrue to a patentee upon publication of the patent application by the authorities in the patent journal during the examination process, though any infringement proceedings can only be instituted after the patent has been granted — New Section 11(A)7.

Thus, in respect of such new applications made after January 1, 2005, a generic drug manufacturer can be prevented from making the product covered by the application only after the grant of such patent. No damages for infringement can be claimed on such manufacture until the date of publication of the application by the patent authorities.

Since the rights and privileges accrue to the patentee from the date of publication, one view is that damages for patent infringement may be claimed from the date of publication and not only from the date of grant of the patent.

However, in this context, Section 111 of the Patent Act of 1970 is also relevant. It provides that no damages for patent infringement can be claimed against an alleged infringer "who proves that at the date of the infringement he was not aware and had no reasonable grounds for believing that the patent existed."

In the authors' view, this defence may be available so long as a patent has not been granted because, until then, the question of `patent existed' does not arise.

Hence, it is not certain whether damages can be claimed from the date of publication of the application since during such period the patent would not have existed.

From the date of the grant of the patent, an infringer would be liable for damages unless he is able to prove that he had no knowledge or had no reason to believe that a patent existed.

The expediency of an Ordinance was resorted to so as to comply with India's obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) by the January 1, 2005 deadline. However, the Ordinance, seeking to amend the Patents Act, 1970 could lapse if not approved by Parliament during the next session.

It is a moot point whether the Government should resort to a Presidential Ordinance bringing about far-reaching changes in patent law without a parliamentary debate in the first place, in respect of issues on which views have been divided across the country.

However, even if the Ordinance is approved/passed by Parliament, the generic drug industry is likely to continue to flourish by having recourse to the beneficial provisions of the patent regime and due to the known delays in processing of applications by the patent authorities.

(The authors are with DSK Legal, Mumbai. The views are personal.)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page