Section 3(d) of the Indian Patents Act – Part I

There has been considerable press regarding the decision by the Indian Supreme Court in April, 2013, rejecting Novartis’ patent application for the beta-crystalline form of Imatinib Mesylate (known as “Glivec”).  In fact, many have considered this case to be a “test case” regarding the judicial interpretation of Section 3(d) of the Indian Patents Act.  In view of the significance of this decision, it is imperative for those drafting and prosecuting pharmaceutical and biotech patent applications in India to understand this section of Indian patent law.

This is Part I of a two part posting examining Section 3(d).  This post examines the genesis of Section 3(d).  Part II will provide patent drafting strategies to reduce the risk of receiving a Section 3(d) rejection as well overcoming a rejection received during prosecution and/or an opposition proceeding.

At the time of its independence from Great Britain in 1949, India’s patent system was governed by the British enacted Patents and Designs Act of 1911 (1911 Patent Act).  The 1911 Patent Act provided product (including for pharmaceuticals and agrochemicals) and process patent protection and was considered to benefit foreigners far more than Indians.  In April 1972, the Patents Act of 1970 (1970 Patent Act), which was the first comprehensive patent law written solely by the Indian bicameral legislature, came into effect replacing the 1911 Patent Act.  The 1970 Patent Act specifically excluded from patentability product patents directed to food or medicines or drugs (which included insecticides, germicides, fungicides, etc.) and substances prepared or produced by chemical processes (including alloys, optical glass, semi-conductors and inter-metallic compounds).  It is in the 1970 Patent Act that Section 3(d) first appeared:

 “Section 3.  What are not inventions.- The following are not inventions within the meaning of this Act,-

(d) the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant…”

Up until the early 1970’s, India imported most of its essential bulk drugs.  At that time, many in India felt that the country was too dependent on foreign drug manufacturers and that this reliance had resulted in the high cost of drugs in India.  As a direct result of the passage of the 1970 Patent Act, many Indian companies began manufacturing bulk drugs.  This increase in local manufacturing resulted in the rapid rise of the Indian pharmaceutical industry. As a result, India quickly became a major supplier of cheap drugs to a number of developing and under developed countries.

Although the 1970 Patent Act encouraged the production of generic drugs, the unavailability of product patent protection for pharmaceuticals discouraged innovation. When India joined the World Trade Organization in 1995 it was required to comply with obligations under the TRIPS agreement, which required India to revise its patent law to provide product patent protection for pharmaceuticals.  The Indian Parliament struggled to pass a new patent act that not only complied with TRIPS but also did not negatively impact public health (namely, an increase in the cost of drugs in India).  During the course of debate in Parliament, an amendment to Section 3(d) (as well as deletion of Section 5 (which excluded product patents in the fields of drugs, chemicals and food items)) was proposed by the Government in order to alleviate the fears of the Opposition members regarding the re-introduction of product patent protection for pharmaceuticals and agricultural chemicals. Specifically, the Government argued that the proposed amendment to Section 3(d) addressed the concern of the Opposition members with respect to the abuse of product patents for pharmaceuticals and agricultural chemicals. The proposed amendment was accepted and Section 3(d) was amended in the Patents (Amendment) Act of 2005 (2005 Patent Act) and currently reads (additions are shown in bold):

 “Section 3.  What are not inventions.- The following are not inventions within the meaning of this Act,-

(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation – For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

As shown in bold, the amendment added (1) the phrase “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance” and (2) the explanation.  As stated by the Supreme Court in the Glivec case, “[T]he amended portion of section 3(d) clearly sets up a second tier of qualifying standards for chemical substances/pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds”.

In an attempt to prevent evergreening, and extended monopolies, Section 3(d) stipulates that only those pharmaceutical “derivatives” that demonstrate significantly enhanced “efficacy” are patentable. In this regard, Section 3(d) draws a vivid distinction between “evergreening” and incremental innovation. By allowing only derivatives with added efficacy to be patentable, Section 3(d) encourages further improvement and development of existing technologies that help bring improved products to the market, thereby also addressing public health needs.

In its opinion in Glivec, the Supreme Court had the burden of defining the term “efficacy” as it is used in Section 3(d), which has no statutory equivalent in any other patent act in the world. According to the Supreme Court, the test of efficacy is different for each drug and will depend upon the desired or intended result of that product.  In the case of drugs to be administered to treat diseases, the test of efficacy is “therapeutic efficacy”.   Specifically, the court stated “What is evident, therefore, is that not all advantageous or beneficial properties are relevant, but only such properties that directly relate to efficacy, which in case of medicine, as seem above, is its therapeutic efficacy.”  The Supreme Court stated that an increase in bioavailability could be used to protect an invention under Section 3(d) if evidence was provided to establish that such an increase leads to a greater therapeutic efficacy.  As will be explained more in the next post, Applicants relying on bioavailability to establish patentability will need to establish a link between increased bioavailability and an increase in the therapeutic efficacy of their claimed drug.

This post was written by Anthony Wenn and Lisa Mueller.  Thanks to the Chadha & Chadha firm for reviewing this posting and providing their comments and insights to the BRIC Wall on Section 3(d).

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