New guidelines in Brazil give more power to ANVISA in the examination of pharmaceutical patent applications

On March 13, 2017, the board of directors of Agencia Nacional De Vigilancia Sanitari’s (ANVISA) announced that they had reached a new agreement with the Brazilian Patent Office, namely, the Instituto Nacional da Propriedade Industrial (INPI), concerning the prior approval provision under Article 229-C of the Brazilian Patent Statute (For more information about the 229-C article, please see our posts here, here, and here).  On April 12, 2017, after an event with several authorities and President Michel Temer, ANVISA and INPI published a written version of the new joint guidelines #1/2017 (translation enclosed here:  INTERAGENCY ORDINANCE). These guidelines describe the new workflow between ANVISA and INPI involving the examination of pharmaceutical patent applications.

Article 4 of the guidelines establishes that ANVISA will analyze whether a patent application is contrary to public health.  According to Article 4, a patent application claiming a product or process is considered to be contrary to public health when the product or process presents a “health risk”.  The article further states that the “health risk” will be characterized when the pharmaceutical product comprises, or the pharmaceutical process results in a substance that has been prohibited in the country”.    

If a product or process is found to pose a “health risk” (as defined in the Annex I of the Ministry of Health’s Ordinance #344 of 1998), ANVISA will deny prior approval and will send the application back to INPI for further handling. At this point, INPI will publish the definitive dismissal of the application. In other words, the application is denied.

The guidelines contain a new approach in the examination of patent applications claiming pharmaceutical products and processes of interest under the Brazilian government’s drug policies and pharmaceutical assistance of the National Healthcare System (SUS). Under Article 5, ANVISA will examine these applications of interest and prepare a “technical” opinion as to whether the claims meet the patentability requirements under Brazilian law.  This opinion will be sent to INPI for use as a third-party observation under Article 31 of the Patent Statute of 1996.  Once INPI receives ANVISA’s opinion, it is “free” to decide whether or not to agree with it.  In the event INPI disagrees with ANVISA’s opinion and grants the patent application, it will send ANVISA a list containing all granted patents and will continue to make this list available to ANVISA (Article 7 of the guidelines).  

The guidelines do not contain any information as to what ANVISA can or should do with the list of granted patents received from INPI.  Actions that ANVISA could take include filing a post-grant opposition or seeking invalidity of the patent before Federal Courts. 

Article 9 of the guidelines creates an Interagency Group between the two agencies. The purpose of this group is to seek to “harmonize” the understanding between the ANVISA and INPI regarding the application of patent law in “polemic” topics such as Markush claiming, selection inventions, the patentability of new uses, salts, polymorphs and antibodies, as well as other issues relevant to the pharmaceutical industry.  One concern is that such “harmonization” could result in an unlawful administrative ban of claims that are currently being allowed INPI. As such, Article 9 gives ANVISA power to influence the INPI in a multitude of ways. 

Additionally, it is important to note that the new guidelines come after several decisions were obtained against ANVISA by various pharmaceutical companies (See our post here) holding that that the agency lacked the statutory authorization to examine patentability requirements under Brazilian law.  After these early decisions were rendered (which held that ANVISA’s prior approval review was restricted solely to the analysis of potential public health issues and not patentability requirements), ANVISA amended its guidelines to include a provision stating that “the granting of patents that do not fulfil the patentability requirements violates public health”. This change was interpreted by the courts as an attempt by the agency to escape the unfavorable case law and avoid the new guidelines.  

As a whole, the guidelines read like an attempt by ANVISA to revive its ability to participate in the examination of pharmaceutical patent applications.  Interestingly, many the associations representing generic companies in Brazil such as ABIFINA and Pro Generics are celebrating the guidelines as a victory for the local industry. 

Continue to watch the BRIC Wall Blog for continuing updates on these new guidelines in Brazil.

This post was written by Lisa Mueller and Roberto Rodrigues Pinho from Licks Attorneys.

 

 

 

Brazil: Courts confirm preliminary injunction based on pending patent applications

On March 15, 2017, the Sao Paulo State Court of Appeals confirmed a preliminary injunction barring Uniao Quimica, a Brazilian generic company, from launching a generic version of Allergan’s Combigan® (brimonidine tartrate and timolol maleate).  Combigan® is prescribed for the reduction of elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension who require adjunctive or replacement therapy due to inadequately controlled IOP.   

The preliminary injunction was granted in view of three patent applications filed by Allergan and pending before the Instituto Nacional da Propriedade Industrial (INPI) since 2003 (namely, patent application no. PI0302584-5 filed in 2003 as well as divisional application nos. BR1220140116901-9 and BR122014016915-9 filed in 2012).  Application no. PI0302584-5 was rejected by INPI; however, an administrative appeal is pending. 

Allergan argued that the backlog and inefficiency of INPI had been punishing to the pharmaceutical company.  Specifically, Allergan argued that not granting the preliminary injunction based on the pending application would be “allowing third parties to freely infringe the application during its pendency”, and that the “patent owner would be absolutely deprived of effective means to protect its invention during the prosecution of the application, a proceeding the patent owner has no control over”. 

After the Trial Court issued an injunction on September 28, 2016, Uniao Quimica filed an interlocutory appeal challenging the grounds of the decision.  The reporting Appellate Judge, Hon. Francisco Loureiro, stayed the injunction concluding that the patent owner was only allowed to exclude others based on its patent rights after issuance of the patent by INPI. 

However, in a split decision (2-1), other members of the panel dissented from Hon. Loureiro, thus rejecting the interlocutory appeal and confirming the preliminary injunction.  The Hon. Cesar Ciampolini issued the deciding vote, stating that the preliminary injunction should be granted for the following reasons: (i) INPI’s inexcusable delay in examining patent applications; (ii) the rapid pace at which technology becomes obsolete; (iii) counterpart patents has been granted in several countries; (iv)  Uniao Quimica did not deny that its products were copies of Combigan®; and (v) Uniao Quimica’s behavior in launching generic copies was a matter of unfair competition and should not be allowed by the courts.

Although Uniao Quimica may still appeal to higher courts, the decision is an interesting outcome in view of INPI’s backlog in examining patent application.

Please continue to watch the BRIC Wall Blog for updates on the examination of patent applications by INPI.

This post was written by Lisa Mueller, Felipe Mesquita and Roberto Rodrigues Pinho of Licks Attorneys.

 

Changes to the IP Landscape in Turkey-Industrial Designs

On December 22, 2016, Turkey adopted a new IP Code of Property no. 6769 IP (IP Code), which repealed and replaced the Decree Laws on Patents and Utility Models, on Trademark and Service Marks, on Industrial Designs, and on Geographical Indications (Decree Law).  The new IP Code entered into effect on January 10, 2017.  In this multi-part series, we will address how this new IP Code changes the IP landscape in Turkey.  In our second installment of the series, we will examine the changes to the codes relating to industrial designs.  In part one, we examined the changes to the codes involving patents and utility models.

Submission of the Description of the Designs

Under the new IP Code, during examination, the submission of the description of an industrial design is optional.  This is because the information provided in the description does not affect the scope of the protection of the design.  In contrast, the former Decree Law required such a description to be provided during examination.  The new IP Code avoids an obligatory requirement for registering a design.

Industrial Designs will be Examined for Novelty

During examination, a design will now be examined for“novelty”.  Designs found not to be novel will be ex-officio refused.  The former Decree Law did not provide an ex-officio novelty search stage during examination.  In fact, novelty could only be questioned through a post-grant opposition or an invalidity action before the IP Courts.

Visible Parts of a Complex Product

According to the IP Code, only the visible parts of a complex product are protectable.   However, in order for the visible parts of a complex product to be protected, the visible parts must meet novelty and distinctive character requirements.  A design is considered to be novel if before the application date no identical design has been made available to the public anywhere in the world.

A design is understood to have an distinctive character if the overall impression it creates on the informed user is significantly different from the overall impression created on the same user by any design which has been made public (in Turkey or anywhere else in the world) before the application date of the design.  In the assessment of the distintiveness, the emphasis of the evaluation will be on the common features of the design; however, the degree of freedom of the designer in developing the design will also be taken into consideration.

Spare Parts of a Complex Product

According to Decree Law, the owner of a registered design could not assert its rights with respect to a visible part of a complex product until three years after the time period after which the design was first made available to the public. The new IP Code introduces a new derogation stating that the this three year period is not be applicable if the protected spare part design is mentioned among the list of “equivalent parts” issued by the Ministry of Science, Industry, and Technology.

Shorter Opposition Period

Under the new IP Code, the post grant-opposition period is now three instead of six months.  The reduction from six to three months will reduce the total registration time to less than a year.

Non-Registered Industrial Design Rights

In order for a design to be protected as a “non-registered” design, the design must first be made available to the public in Turkey.  The duration of protection for a non-registered design is three years from the date the design was first made available to the public (in Turkey).  Interestingly, non-registered design protection is intended to protect fast changing designs which are not intended to be registered for long periods by the design owner.  This type of protection will avoid registration costs for the designs for which registration is not preferred.  However, the owner of a non-registered design will be requested to evidence of ownership and that the design was first made available to the public in Turkey when enforcing its rights.

Non-registered designs are also protectable without any time limit under the unfair competition provisions of the Turkish Code of Commerce which remain in force.  During the next few years, it will be interesting to watch whether the Courts in Turkey will still allow such unfair competition cases after the completion of the 3 year protection period.

Enforcement of Non-Registered Designs

Under the new IP Code, designs are protectable for three years from the date of first public disclosure, if such disclosure was made in Turkey.  This protection is available for non-registered designs to prevent the use by third parties of identical or similar non-registered designs.  The IP Code also provides a common provision for the compensation of damages arising from intellectual property rights including registered and non-registered designs.  As a result, a design holder can ask for material damages which include actual damages and loss of income.  The loss of income can be calculated pursuant to one of the three (3) options mentioned in the IP Code, namely, the loss of income of the plaintiff, the income of the defendant or in accordance with an exemplary license fee.  Upon request by the plaintiff, the Court can increase the damages for the design holder under specific circumstances.  Moreover, the design holder can also seek moral/reputational damages.

Under the IP Code, a design holder can ask the Court to issue a preliminary and/or permanent injunction, compensation, the confiscation/destruction of the infringing goods and the tools and machinery (such as those used for manufacturing the infringing products), the publication of the verdict in a daily newspaper or any similar award.

Please continue to watch the BRIC Wall Blog for the remainder of the series on changes to the intellectual property landscape in Turkey.

This post was written by Lisa Mueller and Kate Merath of Michael Best and Okan Can of Deris.

Changes to the IP Landscape in Turkey – Patents and Utility Models

On December 22, 2016, Turkey adopted a new IP Code of Property no. 6769 (IP Code), which repeals and replaces the Decree Laws on Patents and Utility Models, on Trademark and Service Marks, on Industrial Designs, and on Geographical Indications (Decree Law).  The new IP Code went into effect on January 10, 2017. In this multi-part series, we will address how this new law changes the IP landscape in Turkey. The first part of the series will focus on changes to the codes regarding Patents and Utility Models.

Post Grant Opposition

Previously, the only way to contest a patent under Turkish Patent Code was to file a cancellation action before the courts.  However, under the new IP Code, third party oppositions against granted patents are now possible.  Specifically, the opposition must be filed within six months of the publication of a grant decision.  Once filed, the patentee is notified of the opposition by the Turkish Patent and Trademark Institute (TPTI), and invited to submit an opinion regarding the opposition or amend its patent (namely, the claims and/or specification).  Although the examination board is yet to be established, the board will serve to examine the opposition and patentee’s opinion and amendments, and ultimately decide whether to invalidate the patent or refuse the opposition.  The IP Code and the draft of the Regulation on the Implementation of the IP Code, do not stipulate any oral hearing for the opposition proceedings.  Third parties may oppose a patent on the grounds that the:

  • Subject matter of the invention is not novel / does not involve inventive step / is not susceptible of industrial application;
  • Subject matter of invention is excluded from patentability;
  • Invention is not disclosed sufficiently clear and complete;
  • Invention contains subject-matter which extends beyond the content of the application as filed- the subject-matter of the patent is not patentable;
  • Invention is not disclosed in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art; and
  • Subject-matter of the patent extends beyond the content of the application as filed.

The examination board will examine the opposition, observations and amendments of the patentee and issue a decision on the revocation/amendment of the patent.

Biotech Patents and Subject Matter Eligible

The provision of the IP Code relating to patentable inventions defines the types of inventions which are not patentable.  Specifically, the discovery of any elements of the human body and the human body itself in its natural environment are not patentable.  For example, claims directed to human gene sequences or process for cloning a human being will be rejected as being directed to non-patentable subject matter.  Unfortunately, claims directed to proteins and antibodies are not specifically addressed.  With respect to diagnostic methods, these methods are considered to be non-patentable subject matter in accordance with the European Patent Convention (EPC).

Second Medical Use Patents

The Turkish Supreme Court overruled a 2014 Istanbul IP Court decision which held that the second medical use claims granted by the European Patent Office (EPO) under the European Patent Convention (EPC) 1973 were null and void.  The Supreme Court further emphasized that Turkish law does not exclude second medical use inventions from patentability, and acknowledges the protection of second medical use patents validated through the EPC.  Unfortunately, the new IP Code is silent with respect to the patentability of second (and further) medical indications of a per se already known substance or composition (second medical use inventions).

Swiss-type claims are not allowable before the EPO for an EP patent application having a filing date or an earliest priority date after 29 January 2011 (G 2/08).  However, in practice, the TPTI accepts any type of claims via validation through the EP route without conducting any further examination. Therefore, for effective protection of second medical use patents, it is recommended that applicants proceed through EP validation in Turkey.

Abolition of the Seven-Year Patent System

Under the previous Turkish patent law, a seven year short-term patent could be obtained without an applicant’s having proceeded through substantive examination.  The new IP Code mandates that all applicants request substantive examination of their applications.  Failure to do so will result in the application being considered to be withdrawn.  It is expect that this change will improve the quality of patents and to provide an overall stronger patent framework, particularly for small and medium sized enterprises.

The new IP Code applies to international and national patent applications filed after the enactment of the new IP Code.  What this means is that international and national patent applications filed before the enactment of the IP Code will be treated according to the provisions of the Decree Law.  It is important to note that should a patentee of a seven year short-term patent wish to convert to a twenty year long term patent through a request of substantive examination, such request will be treated in accordance with the Code in force at the date of the filing of the request.

Utility Model System Re-Adapted

A novelty search will now be required for utility model applications and applicants will have the opportunity to file amendments during the registration proceedings.  Although post grant oppositions may be filed against patents, post grant oppositions will not be allowed for utility models.  Moreover, the new IP Code stipulates that no utility model certificate will be granted for:

  • Biotechnological inventions;
  • Chemical processes or products, or any products or processes obtained therefrom; and
  • Pharmaceutical processes or products, or any products or processes obtained therefrom.

Employee Inventions System for Universities

Under the new IP Code, any inventions made by scientific staff (including Ph.D. students and non-Ph.D. students) as part of their university employment, belong to the university under certain conditions.  This new requirement removes the previous “professor’s privilege”, provided under the Decree Law that provided that researchers and academicians working at universities could automatically own the invention subject to the patent.  The new IP Code also states that at least 1/3 of the income generating from use of the patent will belong to the inventor researcher/academician.

Compulsory Licensing

The new IP Code provides new grounds for the granting compulsory licenses.  Specifically, the patentee can be requested to grant a compulsory license if the patentee breaches competition such as to block, restrict or destruct the competition in the market.  The patentee may also be asked to grant a compulsory license if the use of the patent does not meet the local market needs of the country.

Burden of Proof in Process Patents

Under the previous law, the burden of proof in process patent infringement cases was provided in two Articles.  Specifically, the first article, Article 84 of the Decree Law No. 551 stated that where a process patent claimed the manufacture of new products or substances, unless there was proof to the contrary, any product or substance having the same properties (as the product produced by the patented process) were automatically deemed to have been obtained using patented process.  Under this situation, the burden of proof was with the person claiming the contrary.

The second article, Article 136, provided that where a process patent claimed the production/preparation of a product, all products possessing the same properties (as the products produced by the patented process) were deemed to have been manufactured by the patented process. A defendant claiming that it manufactured/produced the product without infringing the patented process had the burden of proof.

In the new IP Code, Article 141/2 states that where a process patent claims the production/preparation of a product or a substance, the court may request that the defendant prove that its product (having the same properties as the product produced by the claimed process) has been produced/manufactured without infringing the patented process.  Where the patent claims a process for the production/preparation of a new product or substance, all products possessing the same properties as the product produced by the patented process, will be considered to have been produced/manufactured by the patented process.  A defendant claiming that it manufactured/produced a product without infringing a patented process will have the burden of proof.

Please continue to watch the BRIC Wall Blog for the remainder of the series on changes to the intellectual property landscape in Turkey.

This post was written by Lisa Mueller and Kate Merath of Michael Best and Okan Can of Deris.

Two Important Decisions Addressing ANVISA’s Prior Approval of Pharmaceutical Patents in Brazil

In the second half of 2016, two very interesting decisions were issued by the federal courts in Brazil against the Brazilian Food and Drug Agency (ANVISA) involving the prior approval of patent applications claiming pharmaceutical products.  These decisions bring some very good news to pharmaceutical patent owners who have struggled for years with ANVISA while trying to protect their pharmaceutical patents in this country. 

In the decisions, Genentech and Novartis each obtained preliminary injunctions against ANVISA in cases of prior approval of their patent applications under Article 229-C of the Brazilian Patent Statute (Additional information about each of the decisions can be found here:  novartisdecision genentechdecision).  Specifically, Novartis’ patent application claims fingolimod (Gilenya) and Genentech’s application claims bevacizumab (Avastin). 

Two different trial judges affirmed that ANVISA did not have the authority to examine patentability requirements under Article 229-C of the Patent Statute.  In the decision involving Genentech’s application, the judge, the Honorable Diana Silva, limited ANVISA’s role during the prior approval process to only aspects involving public health. The decision also stated that the Brazilian Patent and Trademark Office, namely, the Instituto Nacional da Propriedade Industrial (INPI) is the sole legitimate agency to examine the patentability requirements of patent applications directed to pharmaceutical products. 

The decision involving Novartis’ application is an important case for pharmaceutical companies facing the issues of backlog and pendency of their patent applications in Brazil.  Specifically, in this case, Novartis sought a preliminary injunction against ANVISA, claiming that the agency was taking an unreasonable amount of time to issue a decision regarding prior approval.  Additionally, Novartis also requested preventive measures against the agency to prevent it from examining the application for compliance with patentability requirements under the Brazilian Patent Statute (which is the function of INPI).   The judge, the Honorable Iolete Oliveira, accepted  Novartis’ arguments and granted a preliminary injunction ordering ANVISA to:  (1) analyze the prior approval of the patent application within 15 days; and (2) abstain from examining the application for compliance with any patentability requirements but focus instead only on aspects of public health. 

Both of these decisions highlight that the Brazilian federal courts are willing to limit ANVISA’s role under the prior approval analysis.  The Novartis case establishes important precedent that can be used by other companies currently waiting ANVISA’s decision on prior approval analysis. 

Please continue to watch the BRIC Wall Blog for continuing updates on Brazil’s prior approval of pharmaceutical patent applications.

This post was written by Lisa Mueller and Roberto Rodrigues Pinho, LLM candidate at Stanford University.

Delhi High Court Strikes Down Section 24(5) of the Plant Varieties Act as Unconstitutional

On December 2, 2016, the Delhi High Court struck down Section 24(5) of the Plant Varieties and Farmers Rights Act, 2001 (Act) as unconstitutional in Prabhat Agri Biotech Ltd. et al. v. Registrar of Plant Varieties. As will be discussed in more detail below, the Court held that Section 24(5) violated Section 14 of the Constitution of India. Specifically, the Court held that this section of the Act gave unbridled power to the Register, who was not required to have a legal background or possess any legal expertise, to grant interim relief to a breeder against any abusive third party act occurring during the pendency of an application for registration of a variety.

Background

The Protection of Plant Varieties and Farmers Rights Act, 2001 (Act) was passed in 2001 and went into effect in November 2005. The stated rational of the Act is to establish a system for the protection of plant varieties, rights of farmers and plant breeders as well as encourage the development of new plant varieties in India. Additionally, the Act is intended to provide the protection needed to facilitate the growth of the seed industry in India, ensure the availability of high quality seeds and planting material for farmers as well as protect plant breeders’ rights for accelerated agricultural development within the country.

Section 12 of the Act establishes the Plant Varieties Registry (Registry) to facilitate the registration of varieties while also providing for the appointment of as many registrars (Registrars) as necessary to allow for the registration of such varieties. Section 13 of the Act provides for the maintenance by the Registry of a register called the “National Register of Plant Varieties” (Register). The purpose of the Register is to record the names of all registered plant varieties along with the names and addresses of the respective breeders, the right of such breeders in their registered varieties, the particulars of the denomination of each registered variety, its seed or other propagating material along with specification of the salient features and any other information which may be required for registration of the variety.

Section 2 of the Act provides a number of definitions of key terms that are used throughout the Act. For example, Section 2(za) defines a “variety” as a “plant grouping except a microorganism within a single botanical taxon of the lowest known rank, which can be:

(i) Defined by the expression of the characteristics resulting from a given genotype of that plant grouping;
(ii) Distinguished from any other plant grouping by expression of at least one of said characteristics; and
(iii) Considered as a unit with regard to its suitability for being propagated, which remains unchanged after such propagation,
and includes propagating material of such variety, extant variety, transgenic variety, farmers’ variety and essentially derived variety.”

Section 2(i) defines an “essentially derived variety”. Specifically, this section states that a variety (the initial variety), shall be said to be essentially derived from such initial variety when it:

(i) “is predominantly derived from such initial variety, or from a variety that itself is predominantly derived from such initial variety, while retaining the expression of the essential characteristics that results from the genotype or combination of genotype of such initial variety;
(ii) is clearly distinguishable from such initial variety; and
(iii) conforms (except for the differences which result from the act of derivation) to such initial variety in the expression of the essential characteristics that result from the genotype or combination of genotype of such initial variety.”

Section 2(j) defines “extant variety” as a variety available in India which is:

(i) “notified under section 5 of the Seeds Act, 1966 (54 of 1966); or
(ii) farmers’ variety; or
(iii) a variety about which there is common knowledge; or
(iv) any other variety which is in public domain”.
(v)
Section 2(k) defines “farmer” as any person who:
(i) “cultivates crops by cultivating the land himself; or
(ii) cultivates crops by directly supervising the cultivation of land through any other person; or
(iii) conserves and preserves, severally or jointly, with any person any wild species or traditional varieties or adds value to such wild species or traditional varieties through selection and identification of their useful properties.”

Section 2(l) defines a “farmers’ variety” as a variety which:
(i) “has been traditionally cultivated and evolved by the farmers in their fields; or
(ii) is a wild relative or land race of a variety about which the farmers possess the common knowledge”.

A variety can be registered by submission of an application to the Registrar. According to Section 16 of the Act, an application can be submitted by any “person”. A “person” includes:

(i) any person claiming to be the breeder of the variety; or
(ii) any successor of the breeder of the variety; or
(iii) any person being the assignee of the breeder of the variety in respect of the right to make such application; or
(iv) any farmer or group of farmers or community of farmers claiming to be the breeder of the variety; or
(v) any person authorized in the prescribed manner by a person specified under items (i) – (iv) to make application on his behalf; or
(vi) any university or publicly funded agricultural institution claiming to be the breeder of the variety.

Section 18 describes the specific technical and other information that must be included in each application. According to Section 15, once an application has been submitted, a variety can be registered only if it satisfies the criteria of novelty, distinctiveness, uniformity and stability. During the examination process, the application can be amended if requested by the Registrar. Once an application is accepted, it is published for opposition. If no opposition is filed or if an opposition is rejected, the Registrar will register the variety and issue a certificate. If the certificate issued is for an essentially derived variety, the certificate is valid for nine years from the date of registration for trees and vines and six years from the date of registration for all other plants (which is renewable). However, , the total period of validity of a registration cannot exceed:

(i) eighteen years from the date of registration for trees and vines;
(ii) fifteen years from the date of the notification of that variety by the Central Government under section 5 of the Seeds Act, 1966 (54 of 1966) for extant varieties; and
(iii) fifteen years from the date of registration of a variety in all other cases.

According to Section 28(1) of the Act, a certificate confers an exclusive right on the breeder or his successor, agent or licensee, to produce, sell, market, distribute, import or export the variety. One interesting provision of the Act, which will be discussed in more detail below, is Section 24(5) which gives the Registrar the “power to issue such directions to protect the interests of a breeder against any abusive act committed by any third party during the period between filing of application for registration and decision taken by the Authority on such application”.

Prabhat Agri Biotech Ltd. et al. v. Registrar of Plant Varieties

The petitioners, Prabhat Agri Biotech Ltd. (Prabhat), Nuziveedu Seeds (Nuziveedu) and Kaveri Seed Company Ltd. (Kaveri), challenged the vires of Section 24(5) of the Act. Nuziveedu, a sister company to Prabhat, had, over the course of several years, various hybrid and parental cotton lines copied from one of the respondents, Maharashtra Seeds (Maharashtra). In fact, Maharashtra filed an application to register a hybrid variety of cotton which was alleged to have been developed using Nuziveedu’s proprietary parent lines. After filing its application, Maharashtra filed an application under Section 24(5) against Prabhat and Nuziveedu. The third petitioner, Kaveri, was not subject to an application under Section 24(5) by any third party.

During the proceeding, the Solicitor General, on behalf of the government of India, argued that Section 24(5) was necessary for the public interest. Specifically, the Solicitor General argued that this section of the Act was based on Article 13 of the International Convention for the Protection of New Plant Varieties, 1991 (UPOV), which necessitated Article 24(5) because it obligated parties to take suitable steps to safeguard the rights of applicants during the period during which their application was under evaluation. Specifically, the Solicitor General pointed to the statements in Article 13 of UPOV which states:

“Each Contracting Party shall provide measures designed to safeguard the interest of the breeder during the period between the filing or the publication of the application for the grant of a breeder’s right and the grant of that right. Such measures shall have the effect that the holder of a breeder’s right shall at least be entitled to equitable renumeration from any person who, during the said period, has carried out acts which, once the right is granted, require the breeder’s authorization as provided in Article 14. A Contracting party may provide that the said measures shall only take effect in relation to persons whom the breeders has notified of the filing of the application.”

According to the Solicitor General, Section 24(5) was based on sound public policy due to the fact that Article 13 of UPOV required a measure of interim protection. As a result, Section 24(5) had to be enacted.

In its decision, the Court stated that the power conferred upon the Registrar in Section 24(5), namely, the ability to make an interim order anytime during the pendency of an application, was simply too broad. Specifically, the Court stated:

“…its exercise is not in any manner conditioned upon consideration of any objective material. The only guidance given in the section was that such an order could be made if a person were engaged in an ‘abusive act’”.

According to the Court, an “abusive act” contemplated a range of behaviors from suspicion of infringement or use of someone’s material to the genuine use of material legitimately developed by a rival. As such, the Court stated:

“In other words, ‘abuse’ is not only wide and vague in its import, but ‘abuse’ by which entity – a specified third party, or generically all other parties (consider third parties) in the subject-object verb relationship sharpens the concern that the power (to issue interim orders) is overbroad and without any guidance. To illustrate, an abuse could be a case of theft of variety and its exploitation by sale; if demonstrable, that it is an abuse might be capable of injunctive relief. However, at the other end of the scale, if there is no theft or allegation of theft but rather claim by the applicant that it has developed the variety first and is, therefore, entitled to protection as opposed to the assertion of a rival that such a position is incorrect and the variety is an extant one, or a farmers’ variety, a possible view can be that use by such rival of the variety is an abusive act. Therefore, the basis for grant of an order under the impugned provision is existence of a vague and undefined state of affairs.”

The Court noted that the Act clearly provided the conditions that an applicant had to fulfill to secure the registration of a new variety. In contrast, the Act was less than clear and even vague in terms of what a Registrar had to scrutinize when deciding whether or not to grant interim relief under Section 24(5). What seemed to trouble the Court was the fact that the power of Section 24(5) was exercisable at any stage, even the moment after an application was filed, regardless of the merits of the case (namely, whether the applicant claimed to be a breeder or farmer of even if the variety was entitled to protection).

Additionally, the Court was further troubled by the fact that while the Act clearly spelled out the rights and obligations of the applicants, the qualifications to be fulfilled and the conditions to be made as well as the various steps involved in the granting or refusal of an application, it failed to specify the requirements and/or qualifications of individuals suitable to hold the office of Registrar. In fact, the Court noted that there was nothing in the Act that required that the Registrar have any judicial or quasi judicial expertise. In view thereof, according to the Court, it was constitutionally impermissible to give the Registrar the power to make significant legal determinations such as those contemplated under Section 24(5) given the potentially far-reaching implications.

The Court concluded stating:

“Given the importance of the Act, there is enormous danger in empowering authorities with unguided and uncanalized power through provisions that can implicate livelihoods and limit or impair food access to tens of thousands – potentially hundreds of thousands of farmers and users of plant varieties. The existence of a large section of farmers unschooled in the provisions of the Act and unaware of their rights renders unethical bioprospecting practices and spurious claims to development of new or other registrable varieties, entitled to registration, a real possibility. Section 24(5) of the Protection of Plant Varieties & Farmers’ Rights Act as cast as present may undoubtedly be an adequate remedy to prevent abusive practices (assuming that what is abusive can be defined over a period of time); yet the danger of abuse of the provision itself and the attendant (likely) long term injury to innocent breeders, framers and those in the business of development of hybrids and plant varieties far outweighs its benefits, in view of the unguided nature of the power, which is destructive of the rule of law and contrary to Article 14 of the Constitution of India. Section 24(5) of the Protection of Plant Varieties and Farmers’ Rights Act, 2001, is, therefore, declared void.”

This post was written by Lisa Mueller of Michael Best .

Property Rights Protection Guideline Released in China

On November 27, 2016, China released a guideline outlining steps for the “better” protection of property rights (Guideline).  The Guideline is referred to as the “Opinion of the Central Committee of the Communist Party of China (CRC) and the State Council on improving the property rights protection (PRP) system and lawfully protecting property rights”.  Property rights in China include creditor’s rights, stock rights and intellectual property rights. 

The Guideline is the first state-level guideline on property rights protection and its purpose is to raise social confidence and promote justice in China.  While not rule of law, the Guideline is important as it is a centrally-issued policy.  Policy plays an enormously important and influential role in China and embodies and conveys certain values and often obtains broad results relatively quickly while final law is promulgated.

According to the Guideline, China will provide equal, comprehensive and law-based protection to all kinds of property rights, including intellectual property, and encourages the participation of the public in the process.  Although China has worked over the years to improve property rights, many problems still exist, including infringement on private property by public power (governments) and weak enforcement of intellectual property rights.  The Guideline states that securing property rights will help raise the public’s sense of wealth security, raise social confidence, foster positive expectations while raising the “impetus for entrepreneurship and innovation by various economic entities”.  Moreover, the Guideline further notes that improving such protection will facilitate social justice while maintaining healthy economic and social development.

According to the Guideline, the “essential strategy” that will be used to strengthen PRP is to “comprehensively” promote the “Rule of Law” (rather than the “Rule of Men”).  As a result, ten (10) tasks will be carried out.  One of these tasks involves reinforcing intellectual property (IP) rights (IPRs).  With respect to IPRs, the Guidelines lists several sub-tasks that need to be completed.  These include:

1.      Increasing punishment for infringement of IPRs as well as the upper limits of damages available once liability for such infringement has been established.  The Guideline states that the concept of punitive damages should be explored and established.  Moreover, compensation for infringement should also cover the reasonable expenses paid by the patent holder to stop the infringement.

2.      Establishing a mechanism to collect information on the source of counterfeit products.  Additionally, companies and individuals found to have infringed IPRs will have such information incorporated into their credit records.  Finally, improving the transparency of IP related administrative punishment procedures will be promoted.

3.      Improving the procedures of IPR trials and actively increasing the role of the intellectual property courts.  Moreover, the Guideline suggests consolidating three judicial procedures (civil, criminal and administrative) into one system to enhance the cooperation between administrative and criminal enforcement.

4.      Improving the enforcement mechanisms for foreign-originated intellectual property.  Specifically, the Guideline suggests strengthening the international cooperation of criminal enforcements and the intensity of investigations.  The Guideline suggests severely punishing those engaging in unfair competition in order to strengthen brand protection.  Finally, the Guideline suggests the combination of IP protection in IPR utilization in order to speed up IP transfer and transformation. 

It appears that courts in China are already beginning to implement some of the tasks outlined in the Guidance.  On December 8, 2016, the Beijing Intellectual Property Court (Court) issued a decision in favor of the patentee in a patent infringement action involving a patent claiming a USB key used by banks.  In its decision, the Court agreed with patentee’s claimed damages of 50 million RMB (about $7,241,969 U.S. dollars (USD)), including damages of 48,142,000 RMB (about $6,972,857 USD) calculated by multiplying the amount of each infringing product by a reasonable profit for each product, inferred damages of 858,000 RMB (about $124,272 USD) resulting from the defendant refusing to submit evidence of the volume of its sales as well as reasonable expenses of 1 million RMB (about $144,839 USD) incurred by the patentee in enforcing the patent.   

Please continue to watch the BRIC Wall Blog for further updates on the implementation of the Guidance in China.

This post was written by Lisa Mueller.