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.

Updates to the Brazilian Food and Drug Administration OTC Drug Guidelines

It has been 13 years since the Brazilian Food and Drug Administration (ANVISA) updated the guidelines regulating which drugs can receive over-the-counter (OTC) status. The much-anticipated guidelines, which issued on August 3, 2016 as Rule #98, revoke the previous Rule #138, which was established in 2003. Rule #138 established which drugs could be sold as OTC medications, according to their therapeutic indications. Drugs currently recognized as safe for over-the-counter use under Rule #138 will continue to be categorized as such until a reassessment can be completed and compliance with Rule #98 evaluated; however the new guidelines allow ANVISA to simultaneously reassess the status of currently available OTC drugs while expanding the number of new products available to consumers.

Rule #98 was previously submitted to Public Inquiry #27 on April 8, 2015. According to ANVISA’s report on the public inquiry, the general feedback was that the new rule will have a positive impact on the market, especially with regards to increasing patient’s access to drugs and the recognition of pharmacists’ roles in healthcare. It is expected that Rule #98 will expand the number of OTC drugs in the Brazilian market, which will increase price competition and marketing efforts towards consumers, rather than physicians.

In order to be compliant with Rule #98, drugs must comply with the following seven criteria:

  1. The drug must have been commercially available for a minimum of 10 years (five years in Brazil), as a prescription drug, or five years, as an OTC drug, in countries where regulations are similar to ANVISA.
  2. The drug must exhibit a high level of safety: the causes of the adverse reactions must be well known and easily reversed, the drug must have a low level of toxicity, a safe therapeutic window, and a low level of interactions with other drugs and food.
  3. The clinical condition treated by the drug cannot evolve rapidly, and its symptoms must be easily identifiable by the consumer.
  4. The drug must pose a low risk when used off label or in overdose scenarios.
  5. The drug cannot be indicated for continuous use; rather, it can only be used for a short period of time or a fixed period of time, which must be identified in the drug’s label (except for drugs labeled for prevention).
  6. The consumer must be capable of using the drug without any physical assistance from a healthcare professional.
  7. The drug cannot cause chemical dependency in consumers.

Companies looking to obtain OTC status for a particular drug can do so at any time; status can be applied for with the Marketing Approval Application, or after the drug has already been approved. The OTC status request must be supported by the required documents listed in Rule #98, ensuring compliance with the above-identified criteria. The company must also support its request with a risk reduction plan, which will inform the ANVISA how it will monitor occasional risks arising from the commercialization of the drug as an OTC product. Once the OTC status is approved, the decision will be published by ANVISA in the Official Gazette and be made available online. The publication will include the active pharmaceutical ingredients (API) in the drug. Once published, companies will have 180 days to make appropriate amendments to the drug packaging and label, as well as have the product sales status changed to OTC.

Importantly, Rule #98 defines which products are not entitled to receive OTC status, which includes drugs that require parenteral administration, or drugs that are commercially packaged, as the quantity of the API per package exceeds the maximum limits established by ANVISA.

The enforcement of Rule #98 will begin 30 days after its publication on September 3, 2016.  Please continue to check the BRIC Wall Blog for additional updates on the enforcement of these new guidelines in Brazil.

This blog post was written by Lisa L. Mueller, Caitlin E. Mac Nair of Michael Best, Ricardo Campello and Roberto Rodrigues of Licks Attorneys.

Update on Patentability of Diagnostic Claims: Australia (Part 1 of an 8-part Series)

This is an update to our 2014 10-part series “The Thorny Problem of Patentable Eligible Subject Matter.” Since that series, the U.S Patent and Trademark Office (USPTO) issued further guidance on December 16, 2014, updated in July 2015 and May 2016 (May 2016 Update), for evaluating subject matter eligibility under Section 101 (Guidance). The new Guidance superseded the March 4, 2014 Guidance.

On July 16, 2016, the USPTO issued a memo commenting on recent decisions by the U.S. Supreme Court (Supreme Court) and the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) in two subject matter eligibility cases directed to life sciences method claims: Sequenom v. Ariosa and Rapid Litigation Management v. CellzDirect, (Rapid Litigation Management) respectively. The memo concludes that neither decision changes the subject matter eligibility framework and that the existing Guidance and training examples are consistent with these cases; however, the memo also notes that the Rapid Litigation Management decision further clarifies the inquiry involved in determining whether a claim is directed to a judicial exception. In particular, the Federal Circuit stated that the “directed to” analysis of a process claim requires more than “merely identify[ing] a patent-ineligible concept underlying the claim” and instead requires an analysis of whether “the end result of the process, the essence of the whole, was a patent-ineligible concept.”

The May 2016 Update provided more detailed instructions for Examiners regarding the formulation of a rejection under Section 101 and evaluation of an Applicants response thereto. Specifically, Examiner’s must identify the exception to patentable subject matter, referred to as a “judicial exception,” that is being claimed, explain what is recited  in the claim and why it is an exception, and identify any additional elements that define claim features/limitations/steps that are beyond the exception. The Examiner must then explain why the additional elements individually AND in combination do not result in the claim as a whole amounting to “significantly more” than the exception.

The May 2016 Update also provided additional examples for application of the Guidance to specific types of life science claims, which were not well represented in the December 2014 Guidance.

As discussed in our 2014 series, the basic requirements for patentability in Australia are found in section 18(1) of the Patents Act (1990) (Act) which states that a claimed invention is patentable if  it (a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and (b) when compared with the prior art base as it existed before the priority date of that claim: (i) is novel; and (ii) involves an inventive step; and (c) is useful; and (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.

In Australia, the general test for patentable subject matter is that an invention is patentable (i.e. a manner of new manufacture) if it provides something that is industrially useful or provides an “artificially-created state of affairs” in a field of economic significance (National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252). Patentable subject matter in Australia, however, has largely been defined by case law. For example, methods of medical treatment of human beings, including surgery and the administration of therapeutic drugs were deemed patentable inventions under section 18 of the Act in Apotex Pty Ltd v. Sanofi-Aventis Australia Pty Ltd., [2013] HCA 50 (4 December 2013). Recently, however, the High Court of Australia (HCA) ruled in Yvonne D’Arcy v Myriad Genetics Inc., that claims covering isolated DNA are not patent eligible, finding that the creation of this category of important rights is best left to “legislative determination.”  D’Arcy v Myriad Genetics Inc (S28-2015) [2015] HCA 35.

Regarding diagnostic method claims, unlike the U.S., there is no recent Australian decision that negatively impacts the patentability of diagnostic claims. In general, diagnostic claims are considered to be directed to an “artificially-created state of affairs,” as they are man-made processes that produce useful and concrete results.

We at the BRIC Wall thought it would be insightful to update our analysis of subject matter eligibility under Australian patent law for diagnostic method claims based on the May 2016 updated Guidance and Life Science examples.

Analysis of Life Sciences Examples from May 2016 Update to USPTO Guidance

Example 29 – Diagnosing and Treating Juliti

Background: Example 29 of the May 2016 Update relates to a hypothetical situation relating to an autoimmune disease called “Julitis.” An Applicant for a patent discovered that Julitis could be diagnosed by detecting the presence of the hypothetical “JUL-1” protein in patients’ plasma, skin, hair and nails. Applicant has disclosed detecting JUL-1 using anti-JUL-1 antibodies that may be naturally occurring (e.g., a human anti-JUL-1 antibody isolated from a patient known to have julitis), or non-naturally occurring (e.g., a porcine anti-JUL-1 antibody created by injecting pigs with JUL-1, or a specific monoclonal antibody named “mAb-D33”).

Two representative claims from this Example are analyzed below.

Claim 1. A method of detecting JUL-1 in a patient, said method comprising:

  1. obtaining a plasma sample from a human patient; and
  2. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody.

Claim 2. A method of diagnosing julitis in a patient, said method comprising:

  1. obtaining a plasma sample from a human patient;
  2. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody; and
  3. diagnosing the patient with julitis when the presence of JUL-1 in the plasma sample is detected.

Analysis of claims 1 and 2: Both claims would constitute patent eligible subject matter in Australia. In the U.S., claim 1 constitutes patent eligible subject matter, while claim 2 constitutes patent ineligible subject matter, as the May 2016 Update indicates that the claim is directed to a judicial exception (i.e., the correlation between the presence of JUL-1 and the presence of julitis in the patient) and as a whole does not amount to significantly more than the exception itself.

Example 31 – Screening for Gene Alterations

Background: Applicant discovered the “wild-type” sequence of the human BRCA1 gene (i.e., the typical sequence of the gene in humans), and has also discovered naturally occurring alterations from the wild-type sequence that are correlated with an increased likelihood of developing breast or ovarian cancer. Applicant’s disclosure provides methods of screening patients for alterations in the BRCA1 gene by comparing a patient’s BRCA1 sequence with the wild-type BRCA1 sequence. The compared sequences can be germline (genomic) DNA sequences, RNA sequences, or cDNA sequences.

At the time the invention was made and the application was filed, scientists routinely compared DNA sequences using two-data generating techniques: (1) hybridizing two different DNA molecules (e.g., a probe and DNA isolated from a patient sample), and detecting whether the molecules bind to each other and form a hybridization product and (2) amplifying (making copies of) at least part of a DNA molecule such as DNA isolated from a patient sample, by using a set of primers to produce amplified nucleic acids, and then sequencing the amplified nucleic acids. The probes and primers used in these techniques are short single-stranded DNA molecules that typically have a naturally occurring nucleotide sequence.

In one embodiment, Applicant discloses using a computer-implemented micromechanical method known as Scanning Near-field Optical Microscopy (SNOM) to detect hybridization of a single probe to its target. At the time the invention was made and the application was filed, the use of SNOM to study DNA hybridization had been discussed in several articles in widely-read scientific journals. However, scientists were not commonly or routinely using SNOM to study DNA hybridization at the time the invention was made and the application was filed. Instead, scientists at the time typically used autoradiography to detect hybridization products.

In another embodiment, Applicant discloses using Cool-Melt polymerase chain reaction (Cool-Melt PCR) to amplify BRCA1 DNA from the patient sample. Cool-Melt PCR uses lower melting and annealing temperatures than conventional PCR, which results in Cool-Melt PCR having a 20-fold higher sensitivity of mutation detection than conventional PCR. At the time the invention was made and the application was filed, Cool-Melt PCR was known and used by a few scientists in the field. Several years after filing the application, Cool-Melt PCR became a standard laboratory technique that appeared in virtually every laboratory manual and was conventionally used by most scientists in the field to amplify mutant nucleic acids.

Three representative claims from this Example are analyzed below.

Claim 1. A method for screening germline of a human subject for an alteration of a BRCA1 gene which comprises comparing germline sequence of a BRCA1 gene or BRCA1 RNA from a tissue sample from said subject or a sequence of BRCA1 cDNA made from mRNA from said sample with germline sequences of wild-type BRCA1 gene, wild-type BRCA1 RNA or wild-type BRCA1 cDNA, wherein a difference in the sequence of the BRCA1 gene, BRCA1 RNA or BRCA1 cDNA of the subject from wild-type indicates an alteration in the BRCA1 gene in said subject.

Claim 70. The method of claim 1, wherein said comparing BRCA1 sequences further comprises:

  1. hybridizing a wild-type probe to a BRCA1 gene isolated from said sample; and
  2. detecting the presence of a hybridization product by measuring conformational changes in the probe that are indicative of hybridization to the BRCA1 gene with scanning near-field optical microscopy.

Claim 80. The method of claim 1, wherein said comparing BRCA1 sequences further comprises:

  1. amplifying by Cool-Melt PCR all or part of a BRCA1 gene from said sample using a set of primers to produce amplified nucleic acids; and
  2. sequencing the amplified nucleic acids.

Analysis of claims 1, 70, and 80: Claims 1, 70, and 80 would constitute patent eligible subject matter in Australia. In the U.S., claim 1 constitutes patent ineligible subject matter, as the May 2016 Update indicates that the “comparing” amounts to an abstract idea, which is a judicial exception, and the claim as a whole does not amount to significantly more than the exception itself.  In contrast, claims 70 and 80 are patent eligible in the U.S., as each claim recites additional elements that distinguishes the claim from well-understood, routine, or conventional techniques in the field (i.e., SNOM and Cool-Melt PCR, respectively), and, therefore, each of claims 70 and 80 as a whole amounts to significantly more than the exception itself.

In view of the above, it is clear that Australian patent law is considerably less restrictive to the patentability of diagnostic method claims as compared to U.S. patent law, at least for the foreseeable future.

This post was written by Lisa L. Mueller and Melissa E. Kolom of Michael Best and John Moore and Tony Davis of Griffith Hack.

An Overview of the USTR’s 2016 Special 301 Report on the State of IPR in Argentina

In this post, the BRIC Wall Blog continues to examine the Office of the United States Trade Representative (USTR) 2016 Special 301 Report (Report) released on April 12, 2016.  Following extensive research and analysis, the Report placed eleven (11) countries on the priority watch list and twenty-three (23) on the watch list. Argentina remains on the Priority Watch List in 2016.

The Report indicates that a major challenge in Argentina is the lack of effective IPR enforcement by the national government. Argentine police do not take ex officio actions, prosecutions frequently stall, and cases may languish in excessive formalities. Furthermore, even if criminal investigations reach final judgment, sentences are not sufficient to deter future infringement.

Argentina also continues to struggle with rampant counterfeiting and piracy. The notorious La Salada market in Buenos Aires is one of the biggest open-air markets in Latin America offering counterfeit and pirated goods. The city of Buenos Aires attempted to combat increasing lawlessness in the market in 2014, but received little assistance from the national government and as such the efforts were unsuccessful. In addition, optical disc copyright piracy is widespread and internet piracy is a growing concern in the country. In several content areas internet piracy rates are approaching 100%. For example, the Argentine-run market Cuevana, which offers pirated movies and TV shows, expanded in 2015 to include a mobile streaming application. The Report also indicates a problem with widespread use of unlicensed software by both private enterprises and the Argentine government. In spite of these issues, criminal enforcement for online piracy is nearly nonexistent.

Argentina also faces a number of ongoing challenges to innovation in the agricultural, chemical, biotechnology, and pharmaceutical industries. Argentina fails to provide adequate protection against the unfair commercial use and unauthorized disclosure of undisclosed test data generated to obtain marketing approval for pharmaceutical or agricultural products. Furthermore, Argentina only provides patent protection from the date of grant of the patent and offers no provisional protection for pending patents. There is a substantial backlog of patent applications, which causes long delays in registering rights. In addition, Argentina requires that the process for the manufacture of active compounds must be reproducible and applicable on an industrial scale in order to be patentable. Resolution 283/2015, introduced in September 2015, limits the ability to patent biotechnological innovations based on living matter and natural substances, including biologics. These measures limit the ability of companies investing in Argentina to protect their IPR and appear inconsistent with international practice.

In spite of these issues, the report states that the United States is hopeful that the recently elected government of President Mauricio Macri will engage more productively to improve the protection and enforcement of IPR in Argentina, thereby creating a more attractive environment for investment and innovation.


Written by Lisa L. Mueller and Rikki A. Hullinger.

An Overview of the USTR’s 2016 Special 301 Report on the State of IPR in Thailand

In this post, the BRIC Wall Blog continues to examine the Office of the United States Trade Representative (USTR) 2016 Special 301 Report (Report) released on April 12, 2016.  Following extensive research and analysis, the Report placed eleven (11) countries on the priority watch list and twenty-three (23) on the watch list. Thailand remains on the Priority Watch List in 2016.

The Report indicates that although steps have been taken to improve IPR protection and enforcement in Thailand, including the launch of the National Intellectual IP Center of Enforcement in 2013 and several legislative measures passed since 2014, these attempts have proven ineffective and unsuccessful.  For example, in 2014 the Thai government introduced several amendments to the Customs Act and Copyright Act in an attempt to decrease the volume of illegal goods transiting through the country and to diminish unauthorized cam-cording in Thai theaters.  Unfortunately, the government failed to consider concerns expressed by foreign governments on prior drafts of the amendments.  As a result, the amendments omitted a much-needed landlord liability provision, failed to provide proper enforcement against unauthorized camcording, and did not set forth adequate protections against the circumvention of technological protection measures (TPMs).

In addition to the above issues, another Copyright Act amendment designed to introduce an option for right holders to obtain a court order to force online service providers to take down infringing content has resulted in a lack of clarity in the operation of the notice-and-takedown procedures. Right holders also express concerns regarding pending legislation imposing content quota restrictions and are concerned about potential unintended effects of pending data and cyber security laws.  The Report indicates that it will be critical for Thai authorities to engage closely with foreign governments and industry to ensure that these and future legislative measures effectively improve IPR protection and enforcement in the country.

Other concerns include a backlog in pending patent applications, widespread use of unlicensed software in both the public and private sectors, growing Internet-based copyright piracy, rampant trademark counterfeiting, lengthy civil IPR proceedings and low civil damages, and extensive cable and satellite signal theft.  Furthermore, Thailand continues to struggle to provide an effective system for protecting against the unfair commercial use and unauthorized disclosure of data generated to obtain marketing approval for pharmaceutical and agricultural chemical products.

In conclusion, the Report urges Thailand to do more to prioritize IPR enforcement and to address longstanding organizational challenges in the country.

This post was written by Lisa L. Mueller and Rikki A. Hullinger, Ph.D.

An Overview of the USTR’s 2016 Special 301 Report on the State of IPR in Venezuela

In this post, the BRIC Wall Blog continues to examine the Office of the United States Trade Representative (USTR) 2016 Special 301 Report (Report) released on April 12, 2016. The Report reviewed the state of intellectual property rights (IPR) protection and enforcement in U.S. trading partners around the world.   After extensive research and analysis, Venezuela remains one of eleven (11) countries on the priority watch list for 2016. 

The Report indicates that the combination of Venezuela’s formal withdrawal from the Andean Community, the reinstatement of its 1956 Industrial Property Law, provisions set forth in Venezuela’s 1999 constitution, and international treaty obligations still in effect has created legal ambiguity for IPR in the country.  Venezuela’s Autonomous Intellectual Property Service (SAPI) has not issued a new patent since 2007, and has substantially increased patent filing and maintenance fees since May of 2015.  Brand owners further report that SAPI regularly approves and publishes applications for trademarks that are similar or nearly identical to registered marks, and that trademark opposition procedures that do exist to combat these issues are slow and ineffective.   Additionally, Venezuela lacks an effective system for protecting against the unfair commercial use and unauthorized disclosure of data generated to obtain marketing approval for pharmaceutical products. 

Venezuela also continues to struggle with widespread counterfeiting and online piracy.  In the past year, infringing copies of movies found to be contributing to online piracy were traced back to unauthorized camcording in Venezuelan theaters.  In spite of these problems, prosecution of IP crimes is rare and penalties in place are insufficient to deter counterfeiters.  In view of these issues, The Property Rights Alliance’s 2015 Intellectual Property Rights Index ranked Venezuela 125 of the 129 countries evaluated and the World Economic Forum’s 2015-2016 Competitiveness Report ranked Venezuela last among all 140 countries evaluated with respect to IPR protection.  Despite these consistently low rankings, Venezuela has made no effort to improve IPR in the country in 2015 and as such remains on the priority watch list for the 2016 Special 301 Report.      

This report was written by Lisa Mueller and Rikki Hullinger.

India’s Stringent and Shifting Policy on Genetically Modified Cotton Seeds

India’s Cotton Industry & Monsanto

India is the world’s second largest producer and exporter of cotton. While India produced cotton before the introduction of genetically modified seeds, Monsanto Company’s (Monsanto) Bacillus thuringiensis (Bt.) cotton technology has helped the country achieve astronomical gains in cotton production as illustrated below in Figure 1.

Figure 1: Average cotton yields in India, 1950-2010

chart 1

Monsanto’s presence in India is as Mahyco Monsanto Biotech (MMB), a 50:50 joint venture between Maharashtra Hybrid Seeds Company Private Limited (Mahyco) and Monsanto. MMB licenses two types of Bt. cotton seeds in India known as Bollard I and Bollard II, respectively. A description of these varieties is as follows:

  1. Bollgard I:
    1. Introduced in 2002, Bollgard Bt. I cotton was India’s first biotech crop technology approved for commercialization. It has built-in protection against infestations by the destructive American Bollworm, Heliothis Armigera, and contains an insecticidal protein from a naturally occurring soil organism. Use of this variety does not require the payment of a royalty fee as bollworms have developed resistance against this variety.
  2. Bollgard II:
    1. Bollgard Bt. II was approved in mid-2006. It provides protection against bollworms and Spodoptera caterpillar, which leads to better boll retention, maximum yield, lower pesticide costs, and protection against insect resistance. Use of this variety requires the payment of a royalty fee.

MMB currently licenses the Bollgard I and Bollgard II technologies to approximately 50 Indian seed companies. These seed companies have introduced the Bollgard technology into their own germplasm and manufacture over 300 different Bt. cotton hybrid seeds. As a result, MMB is the only supplier of genetically modified (GM) cotton seeds in India and more than 90% of the cotton grown employs Monsanto’s technology.

Cotton Farmers in India

Unfortunately, the rise of cotton production in India has not translated to prosperity for the country’s cotton farmers. Instead, high numbers of Indian farmers have committed suicide since 1995, with heavy indebtedness accrued from their cotton business believed to have played a role. The factors contributing to this heavy indebtedness are discussed in more detail below.

Cost of seeds

Bt. seeds can cost up to four times more than traditional varieties of seeds. Farmers purchase fresh seeds annually because the resulting hybrid cultivars contain “terminator” technology, thereby preventing farmers from replanting the seeds the following year.

Need for irrigation/wate

Bt. seeds require irrigation. Sixty-five percent of India’s cotton crop comes from farmers who rely on rain and who do not have access to irrigation. Therefore, unfavorable weather conditions acutely hurt their crops and pockets.

Need for insecticides

The bollworm was not a major pest in Indian cotton in the 1970’s but higher yielding plants produced from GM seeds have drawn more pests.  In 2010, Monsanto admitted that insects developed resistance to its Bt. I cotton seeds and that the Bt. I hybrid crops were no longer effective against the bollworms. In view of this, Monsanto has advocated that Indian farmers switch to Bt. II cotton seed technology because these varieties have a greater ability to delay insect resistance.

Critics have pointed out that insects will eventually develop resistance to the insecticide produced by  Bt. II cotton seeds. They have also noted that the toxin produced by the Bt. II cotton seed is active only for 90 days and that the bollworm is a late season pest (cotton season can last as long as 160 days). Therefore, bollworms have become problematic for cotton farmers. With the rise of industrial agriculture in India and the use of new hybrid and GM seeds, farmers have become increasingly reliant on insecticides. Unfortunately, the bollworms have evolved to become resistant to these insecticides and their natural predator populations have also declined. As a result, farmers must purchase large quantities of insecticides to harvest cotton.

Low pay for cotton farmers

Cotton farming is a low paying profession.  Not surprisingly, a dip in the global price of cotton can spell disaster for farmers. As a result, many farmers have turned to loan sharks to pay for fertilizers, insecticides, and hybrid and GM seeds. Cycles such as this have driven farmers deeper into debt and tragically to suicide.

Many of the materials needed for farming and agriculture in India are heavily subsidized or offered without cost to the farmers by the Indian government. Therefore, the purchase of insecticides and high priced GM seeds as well as the reliance on irrigation and sporadic rains ultimately drain farmers’ finances. Figure 2 below shows that over time, increased adoption of Bt. cotton correlates with an increase in number of suicides by farmers.

Figure 2: Farmer suicides in India, 1997-2006

chart 2.png

India’s Cotton Seed Regulations

The farmer suicide epidemic has resulted in the Indian government regulating prices for Bt. cotton seeds. The aim is to help decrease the financial burden of India’s cotton farmers and break MMB’s monopoly on the GM seed market.

On December 7, 2015, the Ministry of Agriculture and Farmers Welfare (“Ministry”) issued a price control order, entitled the “Cotton Seed Price (Control) Order, 2015”, to bring uniformity in GM Bt. cotton seed prices across the states in India where previously none existed. This Order was created under the section 3 of the Essential Commodities Act, 1955.

On March 8, 2016, the Ministry issued a Notification, under the Cotton Seed Price (Control) Order, 2015 which capped  GM cotton seed prices at Rs. 800 (11.90 USD) for a packet of 450 g of seeds for the financial year 2016-2017. It also reduced the royalty fees (referred to as “trait value” in the Notification) to Rs. 49 (0.73 USD) per 450 g of seeds.

Serial No.

Components Bollgard I version of Bt. cotton hybrid

Bollgard II version of Bt. cotton hybrid


Seed value (in rupees) 635 751


Trait value including taxes (in rupees)



3 Max. Sale price (in rupees) 635


Before the Notification, Bt. cotton seeds were sold at prices ranging from Rs. 830-1000 (12.30-14.80 USD). The royalty fee received by companies such as MMB was cut by 74% (excluding taxes) from the previous royalty fee of Rs. 163 to Rs. 43. The Ministry said that this Notification was prompted because Bt. Cotton’s ability to resist bollworm pest attacks had weakened.

On May 18, 2016, another Notification, entitled Licensing and Formats for GM Technology Agreement Guidelines, was issued under the Cotton Seed Price (Control) Order, 2015. This Notification provided tighter restrictions on GM technology providers, such as MMB. The main restrictions are:

  • GM technology providers cannot deny a license to any qualifying domestic seed company wanting to incorporate the approved GM technology into its own hybrids and varieties.
  • GM technology providers must award license for the GM technology within 30 days of receipt of a request from an eligible seed company. In the event this obligation is not met, the licensee (domestic seed company) is deemed to have obtained the license.
  • GM technology providers cannot charge royalty fees exceeding 10% of the maximum sale price, which is fixed at Rs. 800, for the first five years from the date of commercialization of the technology. After first five year period, the royalty fees are reduced by 10% of initial value every year.
  • If GM technology loses its efficacy, the GM technology provider is not eligible for any royalty fees.

Critiques of the Regulations

The Indian biotechnology industry opposed the regulations on GM technology providers. The Association of Biotechnology Led Enterprises-Agriculture Focus Group, a pro-GM advocacy group (which represents crop research companies such as Monsanto, Mahyco, Syngenta, DuPont, Pioneer, Bayer BioScience, BASF, Advanta) stated the decision would discourage companies from investing in research. Critics from the agriculture industry have called the new regulations arbitrary and innovation stifling. Opponents have criticized the regulations saying that they do not offer methodology on how the Indian government arrived at the final royalty fees, GM technology providers have little to no say on whom to give licenses, and that the aim of these regulations is to benefit one stakeholder: the domestic seed companies.

Monsanto representatives voiced that it would be difficult to justify bringing new technologies into India given the new regulations. The company also threatened to shut down its business in India.

Rescindment of the May 18, 2016 Notification

On May 24, 2016, the Central Government rescinded the notification of May 18, 2016 based on the advice of the Controller and after consulting with the Committee under the Chairmanship of Joint Secretary (Seed) and Controller, Department of Agriculture, Cooperation and Farmers Welfare which was involved in developing regulations.

After the rescindment, the Indian government laid out the May 18, 2016 Notification for 90 days  for comments and suggestions by the public before taking a final call. The decision to seek input by the public  was taken at the highest level of the Indian government because had the May 18, 2016 Notification been final, the move may have hurt foreign investment in agriculture research and discouraged the introduction of new technology in India.

This post was written by Lisa L. Mueller and Himani Nadgauda of Michael Best.