2014, BIO discussion of India

The Biotechnology Industry Organization (BIO) submission (7 February 2014, USTR-2013-0040) to USTR’s 2014 Special 301 Review requested USTR to designate India a Priority Foreign Country.

BIO expressed concerns over the robust use of patent oppositions in India:

The Indian generic industry routinely uses this opposition process to delay the grant of U.S. biotechnology patents in order to produce their own generic copies of products that enjoy meaningful patent protection in other countries. Patent term extensions do not exist in India, which exacerbates the problem and contributes to a loss of value for legitimate U.S. biotech patents in India. Due to the broad nature of post-grant challenges, unlimited pre-grant opposition should be abolished or severely curtailed to better reflect international practice. The ability of third parties to submit references pre patent grant provides sufficient opportunity to weed out applications that do not meet novelty and inventive step requirements; and should be the preferred method of challenge pre-grant. All of these issues coupled with a lack of centrally located and electronically accessible records and requirements to have local agents to obtain basic documentation make the whole process expensive and time consuming.

The docket number for this submission is: USTR-2013-0040.

Here are some choice quotes from the BIO submission to USTR.



India is an important market to biotechnology companies and patents on key products result in sales of hundreds of millions of dollars. However, difficulty in obtaining and enforcing intellectual property rights in India remains a barrier to biotechnology companies. Therefore, BIO requests that USTR designate India a Priority Foreign Country to monitor the recent deterioration of IP rights in India.

Patent Office

The Indian Intellectual Property Appellate Board (IPAB) revoked several pharmaceutical patents in post-grant opposition proceedings in the last two years including patents protecting Sutent,11 Pegasys, Ganfort, Combigan, and Renadyl.12 In addition, IPAB denied an application for a method patent protecting Glyphosate which increases climate resilience in plants. Many of these patents were revoked on multiple grounds including obviousness and inventive step even when these patents are valid on the same standards in other patent offices around the world. If the Indian patent system is an outlier for granting patents, it makes it very difficult for biotechnology companies to continue to invest in India.

11 For Sutent, the IPAB remanded the case back to the Patent Office for a third review and reinstated the patent. However, Sutent is still at risk for losing patent protection.

12 IPAB revoked the process patent but upheld the product patent. However, the product patent is still being challenged in court.

BIO member companies have also found patents invalidated for Section 8 violations (a requirement to provide information regarding corresponding foreign patent applications). The IPAB’s recent judgments have put the obligation on the Patentee to provide the information to the Indian Patent Office (IPO) and non-compliance leads to revocation. This information is easily accessible to the Examiner at the IPO and an unnecessary burden on the patent applicant. The situation is only made worse by the disproportionate punishment attached to this section.

The lack of consistent adherence to patent rules and procedures between the regional patent offices create problems. U.S. companies in India have reported filing in separate regional patent offices and getting opposite results. Increased training on patentability criteria would help alleviate some of the disparities that our companies face on a regular basis. In addition, improved transparency would help guide future prosecution. Expediting pending oppositions would also help alleviate the negative effects on U.S. business in India. India needs a more robust infrastructure for searching and procuring patents, including the ability to identify assignment records and other basic patent filing information. Finally, coordination with other international patent offices through work sharing programs will help standardize the patent application process.

Another concern involves the delay in processing applications coupled with the opposition procedures. The timelines and processes for opposition procedures are not well- defined. Companies often wait dozens of years for a patent application to enter into the examination process only to have the claims opposed in a pre-grant proceeding. The delay in the process results in applications being held up indefinitely, resulting in the loss of the majority of the patent term. Companies have also reported delays in the post-grant opposition proceedings, one company reported waiting almost a year for a decision. Finally, the existence of both a pre and post-grant opposition proceeding creates problems as a U.S. company will survive a pre- grant opposition proceeding and have the patent granted only to face a post grant proceeding from the same opponent.

The Indian generic industry routinely uses this opposition process to delay the grant of U.S. biotechnology patents in order to produce their own generic copies of products that enjoy meaningful patent protection in other countries. Patent term extensions do not exist in India, which exacerbates the problem and contributes to a loss of value for legitimate U.S. biotech patents in India. Due to the broad nature of post-grant challenges, unlimited pre-grant opposition should be abolished or severely curtailed to better reflect international practice. The ability of third parties to submit references pre patent grant provides sufficient opportunity to weed out applications that do not meet novelty and inventive step requirements; and should be the preferred method of challenge pre-grant. All of these issues coupled with a lack of centrally located and electronically accessible records and requirements to have local agents to obtain basic documentation make the whole process expensive and time consuming.

The Patent Office announced on December 24, 2009, that all patentees must submit a yearly “statement of working” that proves that the patentee is exploiting its invention in India. If the company does not comply, the government may issue a compulsory license. The regulation allows the patent office to cancel a patent if it has not been continuously worked on for a period of more than two years after falling under certain specified conditions. This provision may result in the loss of intellectual property rights when a biotechnology company cannot work on the drug due to extraneous conditions (such as an FDA “clinical hold”). Additionally, the biotechnology industry requires long-term development and investment, which results in biotech products not commercializing in three years from the patent grant. U.S. law recognizes this challenge by allowing patent term restoration to compensate for the loss of patent life caused by product development and delays in regulatory approval.

A final issue involves the administrative burden of first filing in India for inventions made by Indian residents. This process hampers efficient patent application filing, especially when the patent applicant is a non-Indian entity that has joint inventions with Indian residents and institutions. India should consider accepting first filling in the country where research or product development is conducted for joint inventions or in the country where the patent applicant is located.

Patent Law

U.S. biotechnology companies have limited capability to obtain valid patents for inventions based on formulations, dosage forms, or chemical variations of an earlier patented product. India imposes higher standards in these areas than are found in the vast majority of other countries. Patents on such inventions are crucial to incentivize biotechnology companies to continue to investigate their discoveries and improve their own products.

While TRIPS Article 27.3 allows member states to exclude method of treatment claims, pursuing that course may not be in India’s best interests. India excludes method of treatment claims, which prevents U.S. biotechnology companies with needed treatment methods from entering the Indian market to provide life- saving products. Further, other patent offices that prohibit method claims (such as the European Patent Office and the State Intellectual Property Office (SIPO) in China) allow claims for the “use of compound X in preparation of a medicament for treating disease Y” or “compound X for use in treating disease Y.” The lack of flexibility in India’s law prevents biotechnology companies from seeking protection and bringing their products to India.

India’s Patents Act requires applicants to disclose the source and geographical origin of biological materials used to make an invention that is the subject of a patent application. Further, the applicant must obtain approval from the India National Biodiversity Authority even when the materials are not native to India (a requirement that seems to only apply to non-Indians). These special disclosure requirements impose unreasonable burdens on patent applicants, subjecting valuable patent rights to great uncertainty. Under the Indian law, the failure to identify the geographical source of a biological material may be a basis for opposition or revocation proceedings; however, the necessary relationship to the patented invention is not clear. These requirements pose unacceptable risks for patent applicants, seem to discriminate on the basis of national origin, and undermine the incentives of the patent system to promote innovation in biotechnological inventions. Further, such requirements are not consistent with India’s obligations under the TRIPS Agreement.

India’s plant variety protection (PVP) law has been in force since 2005, however, India has failed to extend the protection to all crops. Coupled with India’s exclusion of patent protection for plants, the Indian government has created a significant gap in intellectual property protection. Currently, there is no mechanism for appeal and the transitional provision required by the law are not implemented. Finally, the Indian government must address significant inefficiencies in the registration procedures.

Finally, the Indian Patents Act includes Section 3(d), which explicitly excludes from patentability new forms of a known substance that does not result in “enhancement of the known efficacy of that substance.” This requirement excludes from patentability many significant inventions in the pharmaceuticals area, e.g., new forms of known substances with improved heat stability for tropical climates, or having safety or other benefits that may not result in “enhanced efficacy” per se. Even if not removed, new forms of a substance that has benefits to the patient with clear support for its therapeutic improvement should be central to the concept of “improved efficacy” yet are noticeably absent in consideration for granting a patent. In addition, this provision appears to be inconsistent with India’s obligations pursuant to Article 27 of the TRIPS Agreement, which requires that patents be made available to “any inventions … in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.” Section 3(d) also creates an additional hurdle to patentability that is applied only to certain chemical products, and therefore appears to violate the non-discrimination clause with respect to field of technology set forth in TRIPS Article 27.


Indian law recently recognized patent protection for pharmaceutical compounds. As a result, the courts in India have only recently dealt with patent enforcement issues and are still finding their way in handling complex patent issues. The standards for claim interpretation, trial, and enforcement of injunctions are still under development. Generally, the courts have no standards for issuing injunctions and have not given deference to the determinations of the Indian Patent Office. The courts have often not enforced injunctions to protect U.S. company patents. The courts also often decline to uphold patents that have been granted with the same or similar claims in jurisdictions with higher patentability requirements. The courts have also declined to consider granted patents when deciding whether to approve marketing applications by generics if a patent is being tested in the courts or in opposition.

In 2013, the Supreme Court of India denied an appeal for a patent revocation of a cancer medicine, Glivec. The Court found that the medicine was anticipated by prior art and did not satisfy the criteria under section 3(d). Glivec was a breakthrough cancer therapy and is protected by patents around the world. This unique, and arguably TRIPS non-compliant feature of India law, results in creating vast disparities in outcomes that the law and international trade agreements are designed to protect against.

Other recent case law developments have drawn concern from our member companies. A recent case involving Roche and Cipla resulted in the Court deciding Cipla’s unauthorized generic copy did not infringe Roche’s patent but the court also found that the patent was still valid. The court rendered a claim interpretation not in line with international standards. The appeal is still pending since October 2012 and the hearing still has not occurred. In March, 2013, Glenmark launched a generic version of Januvia/Janumet prior to patent expiration and the innovator was not able to obtain a preliminary injunction. While the case is still pending, Glenmark has earned Rs 16 crore ($2.6 million) on these medicines.13 The patent owner still is waiting for a final decision on the preliminary injunction. Other judicial interpretations of the obviousness standard for dosage forms and other similar inventions have also drawn concern.14 The second issue involves the interpretation of the novelty and obviousness standards in the context of an enantiomer product.15 The final issue is the rejection of any applications for new methods for known compounds. 16

13 See http://articles.economictimes.indiatimes.com/2014-01-09/news/46030254_1_glenmark-pharmaceuticals-

14 including Aventis Pharmaceuticals, 1021/CHENP/2006 (2009), and Novartis AG, 728/CHENP/2006 (2009).

15 Astra Aktiebolag, 1255/DEL1995 (2009)

16 GlycoScience Labs 1752/CHE/2006 (2009)

Biotechnology companies would find it helpful if the United States or other nations experienced with patents were able to offer training to the Indian court system to help handle the various issues involved in a patent case. Patent cases are often difficult and require specialized training. Such training would be beneficial to the Indian court system to help them make consistent decisions and create uniform standards for enforcement. Consolidating patent cases into a few specialized patent courts might also help these issues as consolidation would allow judges to gain expertise in a very new and complicated area of law.


Failure to recognize or enforce patents gives generic companies an unfair global competitive advantage. Indian generic companies, who are primarily export-oriented, ship generic medicines to countries where patent protection does not exist making it difficult to bring innovations to these markets. Innovators also find it difficult to stop Indian generic companies from exporting into countries with patent protection.

Indian generic finished products and API are advertised as being equivalent to the innovator product. These products are sold in countries illegally without regulatory approval in that country, often through internet pharmacies. Even with strong IPR, law enforcement is often slow to take action unless the generic is proven to be counterfeit.

Drug Regulatory Body

India’s drug regulatory agency approves generic company applications to market generic drugs if a patent is being challenged. Accordingly, a generic company need only challenge a patent to apply for marketing approval. This loophole creates an unfair advantage for Indian generic companies and undermines U.S. IPR.

India also has not yet implemented any meaningful protection for the data that must be generated to prove that pharmaceutical and agricultural chemical products are safe and effective. Under Article 39.3 of the TRIPS Agreement, protection must be extended against unfair commercial use of such data by makers of generic copies of innovator products (i.e., products that must be shown for the first time to be safe and effective, or to not cause significant risk to the environment). BIO views the 2007 Reddy Report17 and its recognition that the present legal provisions in India do not adequately meet the spirit of TRIPS Article 39.3 as a positive development. Further, BIO views positively the suggestion in that report that India should adopt a five-year fixed data protection term during which the relevant regulatory officials will not rely upon data submitted by the originator when approving second and subsequent applications for the same product. Nonetheless, it appears that meaningful protection for this data will not be implemented in the near term. In addition, even the suggested post-transition period protection suggested in the Reddy Report is subject to numerous, and apparently wide-ranging, proposed “safeguards,” a number of which would appear to undermine the proposed protection almost entirely. Effective market exclusivity for regulated pharmaceutical and agricultural chemical products would contribute significantly to providing adequate and effective protection of intellectual property rights in India for BIO’s members.

17 SATWANT REDDY AND GURDIAL SINGH SANDHU, REPORT ON STEPS TO BE TAKEN BY THE GOVERNMENT OF INDIA IN THE CONTEXT OF DATA ROTECTION PROVISIONS OF ARTICLE 39.3 OF THE TRIPS AGREEMENT (May 31, 2007). E.g., see safeguard (xi), which states that “[i]n cases where repeating the clinical trials for a drug is not considered essential, the Regulatory Authority may allow marketing approval to subsequent applicants of a drug similar to an earlier approved drug by placing reliance on the first applicant’s undisclosed data.”

A clear biologic medicine regulatory approval pathway is still under development in India. Nonetheless, the regulatory system has many shortcomings, such as the ability to seek marketing authorization for biologics with as few as 100-patient clinical trials. Biosimilars of Embrel, Rituxamab and Herceptin have been approved in India with accusations from Indian industry that the regulatory agency is not following the biosimilar guidelines in place since August 2012.18 A biologics pathway consistent with U.S. and European law is necessary for U.S. companies and Indian manufacturers and it will improve access to safe and effective biotechnology products in India.

18 See http://articles.economictimes.indiatimes.com/2013-05-14/news/39256077_1_cipla-drug-controller-biotech

19 BIO’s comments to this discussion paper can be found at the following link http://www.bio.org/ip/international/20100929.pdf.

20 In 2013, Roche dropped patent protection for Herceptin likely due to the deteriorating IP environment in India. The Health Ministry dropped Ixempra from compulsory license consideration around the same time.

Finally, India should adopt a patent linkage system so that they are not inducing companies to violate innovator patents.

Compulsory Licensing

The Indian Patents Act also unreasonably restricts the use of patent rights. The Act provides broad exceptions for use of patented technology by the Indian Government or third parties. It also provides extensive authority for the grant of compulsory licenses, including licenses justified only on the basis that the products falling under the patent are not manufactured in India.

The Indian government published a document on August 24, 2010, titled, “Discussion Paper, Subject: Compulsory Licensing,” which asks for response regarding India’s compulsory licensing regime. The document discusses how India has not yet granted a license, although the government did receive three requests in 2007. The government never acted on the applications as they were withdrawn before the government could evaluate the claims. The document highlights the need for increasing access to essential medicines for the “common man particularly the poorer sections of the population.” We hope that the United States government will engage with the Indian government on this issue and highlight the need to work with and not against the biopharmaceutical industry. Alternative mechanisms may also achieve their goals through the creation of incentives, including strengthening intellectual property protection, to enter the Indian market and ensure the steady supply of next generation medicines for India’s population.19

The Indian generic company Natco Pharma received a compulsory license on Bayer’s Sorafenib which treats liver and kidney cancer. The Controller General found that the compulsory license was justified on three grounds; “reasonable requirements of the public” are not meet, the invention is not available to the public, and the invention is not “worked” in India. The Controller interprets the working requirement to require manufacturing in India. While the facts and legal reasoning are still in doubt for all three requirements, the Controller’s interpretation of the final ground is a clear violation of TRIPS Article 27.1 requiring nondiscrimination based on “the place of invention, the field of technology and whether products are imported or locally produced.”

Early in 2013, the Indian Health Ministry began the process to compulsory license 3 cancer drugs. In September of 2013, the Ministry limited the scope of their initial request and filed a petition to compulsory license Sprycel.20 While this petition is pending, the Indian Patent Office rejected BDR’s petition for a compulsory license on Sprycel for failing to make a “prima facie” case holding the petitioner failed to adequately seek a voluntary license from the patent holder. However, the patent is being litigated in the courts under an infringement suit and could also still be compulsory licensed per the Health Ministry’s request. In providing access to medicines, other tools are more appropriate. BIO’s members cannot continue to bring new investment into countries which abuse the compulsory licensing process in violation of their obligations under TRIPs.

Finally, it is interesting to note that in India spends only 1.19% of its GDP on healthcare. This is well below the expenditure of other least developed and developing countries. For example, Brazil’s government spends 4.23% of their GDP, China 2.73%, South Africa 3.9%, Botswana 6%, Angola 2.39%, Burkina Faso 3.4%, Congo 3.35%, Gambia 2.89%, Cameroon 1.5%, on healthcare. This data provides new perspective to the access to medicines debate and renders India’s policies about IP in this context less credible.21

21 Data through 2011 accessed from the World Bank at http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS/countries. Specific percentages given are a combination of the Health Expenditure, total (% of GDP) which measures public and private spending and the Health Expenditure, public (% of total health expenditure) to calculate public spending as percentage of GDP.

BIO recommends that USTR elevate India to a Priority Foreign Country.