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 India

In this week’s 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, and following extensive research and analysis, placed eleven (11) countries on the priority watch list and twenty-three (23) on the watch list. India is one of the 11 countries on the Priority Watch List in 2016. Although India has made efforts to improve its IPR, and the Indian courts retain their reputation for providing fair and deliberate treatment of both foreign and domestic litigants, long-standing and systemic deficiencies remain, in particular, in the pharmaceutical industry. Just yesterday, the Union Cabinet approved the National Intellectual Property Rights Policy, and a body of government-selected experts (the IPR Think Tank) is working closely with the United States to identify target issues for Indian policymakers. In particular, the Report expresses concerns regarding copyright infringement, patent system policies, trade secrets protection, and trademarks and counterfeiting.

With regards to copyright infringement, India has one of the highest rates of video piracy in the world, and according to a 2013 study, the number of incidents in India accounted for approximately half of all such piracy cases in the Asia-Pacific region that year. Despite the massive $4 billion dollar cost of pirated music and movies per year, India’s media and entertainment industry continue to grow and flourish; it is therefore even more imperative that India incorporate into its legal system more effective measures to counter piracy. To combat copyright infringement, the Report states that the United States has urged India to enact anti-camcording legislation, remodel its statutory license provisions, fully establish India’s Copyright Boards, and take steps to prevent public broadcasters from disseminating pirated content. The United States and India also announced important developments with respect to copyright through the 2015 Trade Policy Forum (TPF) Joint Statement, in which both countries agreed to strengthen copyright protection. The United States additionally held a workshop for a delegation of Indian government officials involved in copyright protection and enforcement, to discuss measures to curb piracy and promote content creation.

The patent system infrastructure in India also poses serious concerns for IPR protection. There is a significant backlog in the prosecution of pending patents, and Section 3(d) of the India Patents Act may limit the patentability of potentially beneficial innovations. The interpretation and application of Section 3(d) is unpredictable, and inventions that have successfully navigated prosecution in other countries can be denied patentability in India. This has been especially noticeable for inventions in software, biopharmaceuticals, agricultural chemicals, and green technologies. In 2015, India’s Ministry of Commerce and Industry issued The Patents (Amendment), Rules, 2015 (Patent Rule Amendments) in an effort to reduce delays in prosecution, however, the proposal incentivized the manufacture of products in India, going against international patent norms. The Indian government also needs to improve the conditions for which a compulsory license would be permitted, as only one compulsory license has been issued under Section 84 of India’s Patent Acts. The Report additionally urged India to provide an effective system for protection against unfair commercial use, without which companies are able to copy certain pharmaceutical products and seek immediate government approval for marketing based on the original developer’s data.

The Report also highlighted that India has not established reliable protection for trade secrets, and it is reportedly difficult to obtain compensation when these laws are violated. Additionally, India’s court system lacks sufficient procedural safeguards to protect trade secrets divulged through discovery, and there is a risk that such information may be publicly disclosed through the course of judicial proceedings. India is making efforts to improve laws that protect trade secret.

With regards to trademarks and counterfeiting, the Report noted that the level of production sale, distribution, importation, and exportation of counterfeit goods affecting India’s market remains concerning. Trademark holders face the risk of diminished profits and loss of reputation when consumers purchase fake products, and governments lose tax revenue since infringers generally pay no taxes or duties. The United States continues to express concerns about counterfeit and pirated goods produced in India and shipped to the United States.

Although India is taking steps to improve IPR protection and enforcement, the United States remains concerned about policies that appear to favor local manufacturing or Indian innovators in such a manner that damages the patent infrastructure not only in India but also around the world. Copyright and trademark infringement continue to pose a serious problem, and the unpredictable interpretation of the law provides modest legal coverage for inventors. It is encouraging that India is working to resolve these issues, however there are a number of important changes that need to be made and additional resources that need to be dedicated to strengthen IPR protection in India.

In the next post, the BRIC Wall Blog will examine in detail the Report’s findings on the state of IPR in China.

This post was written by Lisa Mueller and Caitlin MacNair.

The Turkish Intellectual Property Court Rules on the Patentability of Genes and Other Nucleic Acid Sequences

Background

Familial Mediterranean fever (FMF) is an inherited condition resulting from mutations in the FMF gene and is characterized by recurring episodes of painful inflammation in the abdomen, chest and/or joints. These episodes are often accompanied by fever and sometimes a rash or headache. The FMF gene provides instructions for making a protein called pyrin (also known as marenostrin), which is found in white blood cells.

A Turkish patent issued on October 22, 2007, claiming an isolated gene sequence encoding FMF, nucleic acid probes specific for the normal or mutated FMF gene and a method of detecting the presence or absence of mutations related to FMF an isolated gene.

An invalidity action was instituted against the patent in the Istanbul 1st Court of Intellectual Property (Court).  Specifically, the third party filer requested invalidity of all of the issued claims.  The Court appointed a panel of three experts (a first panel of experts) to assist in evaluating the patentability of the claims.  In invalidity proceedings in Turkey, a panel of experts is hired to assist in evaluating the technical aspects of a patent and to conduct an assessment on novelty and inventive step in light of the documents submitted by the party requesting invalidity.  Interestingly, in this proceeding, because the Court was not satisfied with the first panel, a second panel was hired to replace the first panel.

Ultimately, the Court held the Turkish Patent partially invalid. Specifically, the Court held that claims directed to an isolated gene sequence were invalid and claims covering the probe specific for the normal or mutated FMF gene and the primers for amplification were valid.  The decision can be appealed to the Supreme Court of Turkey by one or both of the parties.  The Supreme Court may maintain or reverse the decision of the Court.  If reversed, the Court can issue a new decision or insist that the original decision be maintained.  If the Court insists on maintaining the original decision, the case will be referred to the General Council of the Supreme Court which will issue a final decision.

Issues Discussed by the Court

The two main points addressed by the Court were (1) the patentability of isolated genes; and the (2) patentability of a method and probe for detecting nucleic acids under Turkish Patent Law.

Patentability of an isolated gene based under Turkish Patent Law

Interestingly, in this case, the Court and the panel of experts held conflicting views on the patentability of genes. Specifically, the Court held that an isolated gene was not patentable because it existed in nature and, as such, should be classified as a discovery. The Court referred to Decree Law No. 551, Article 6 (reproduced below), in support of its decision that discoveries are not patentable.  Additionally, because Turkey is a member of the World Trade Organization (WTO), the Court further held that under TRIPS, Article 27 (reproduced below) certain subject matter could be excluded from being “patentable” in Turkey.

Decree Law No. 551 on the Protection of Patent Rights, Article 6

Non-Patentable Subject Matter and Inventions

  1. The following, not being inventions by nature, shall remain outside the scope of this Decree-Law:
    (a) discoveries, scientific theories, mathematical methods;
    (b) plans, methods and rules for performing mental acts, conducting business activities and playing games;
    (c) literary and artistic works, scientific works, creations having aesthetic characteristics, computer programs;
    (d) methods of collecting, arranging, presenting and transmitting information that have no technical features;
    (e) methods of diagnosis, therapy and surgery applicable to the human or animal body.
    The provisions in subparagraph (e) of the first paragraph of this Article shall not apply either to the actual products and compositions used in connection with the said methods or to the manufacturing process thereof.

    Patents shall not be granted for inventions relating to the following:
    (a) subject matter contrary to public policy or generally accepted standards of morality;(b) plant and animal varieties or processes for breeding plant or animal varieties that are based mainly on biological factors.

    The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Article 27

    Patentable Subject Matter

  1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.  Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.
  2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
  3. Members may also exclude from patentability:
    (a)    diagnostic, therapeutic and surgical methods for the treatment of humans or animals;(b)    plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

The first panel concluded that the invention was merely a discovery and, as a result, not patentable.  In their written opinion to the Court, the second panel disagreed and concluded that biotechnological inventions were patentable.  Specifically, the second panel stated that there was nothing in Decree Law No. 551 on the Protection of Patent Rights, Article 6 (see above), regarding the patentability of methods of treatment, second medical use and biotechnological inventions.  Moreover, the panel noted that Turkey was a member of the Budapest Treaty for Patents in Microbiological Inventions.  Additionally, the panel referred to Decree Law No. 551, Article 46 (reproduced below) to demonstrate that microorganisms and microbiological processes were recognized under Turkish law as patentable inventions. For these reasons, the panel argued that Turkish Patent Law allowed patent protection for elements existing in nature.

Decree Law No. 551 on the Protection of Patent Rights, Article 6 (Reproduced below)

Explicitness of the Description

  1. The description shall be written in sufficiently explicit and comprehensive terms for a person skilled in the technical field concerned to carry out the invention.
    Where the invention relates to a microbiological process and the related microorganism is not accessible to interested parties, the description shall be deemed to meet the requirements specified in the first paragraph of this Article if the following conditions are fulfilled:
    (a) the description contains information regarding the characteristics of the microorganism;
    (b) the applicant has deposited, no later than on the filing date of the application, a culture of the microorganism with an authorized institution established in accordance with international conventions.
    The said institution shall be mentioned in the publication provided for in the second paragraph of Article 55.

The panel cited Directive 98/44/EC (Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of biotechnological inventions, reproduced below) and argued that genes isolated using novel and technical processes were patentable (Note:  Turkey is not a member of the European Union (It is a candidate country).  As a result, this directive is not applicable in Turkey.).  Additionally, in the panel’s opinion, a gene isolated from its natural environment for the first time and having a technical effect might be patentable, even if identical to a gene existing in nature.  Therefore, according to the panel, biotechnological inventions are patentable.

Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of biotechnological inventions, Article 5

Article 5

  1. The human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, cannot constitute patentable inventions.
  2. An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.
  3. The industrial application of a sequence or a partial sequence of a gene must be disclosed in the patent application.

The Court invited the second panel to be heard in the hearing.  During the hearing, two of the experts changed their written opinion and stated that gene sequences should be accepted as a discovery.  As a result, despite the favorable written opinion of the panel, the Court held that a gene sequence is not patentable.

Patentability of a method and probe for detecting nucleic acids

The Court held that probes and methods for detecting nucleic acids were patentable.  Specifically, the Court‘s reasoning was as follows. A probe can only be produced when a mutated gene sequence is known. It is not possible to identify or detect a mutated gene with any probe production processes without knowing the gene sequence. Therefore, the novelty of a probe does not depend on its technique of production but on the sequence of the mutated gene. Since a mutated gene sequence is unique, the probe is patentable, even though probes are simply the chemical copy of the mutated gene and a molecule. As a result, the Court held that the claimed probe and method for detecting nucleic acids claimed in the patent were novel and met the requirement of inventive step.

Conclusion

As mentioned previously, the Court held the Turkish Patent invalid.  This decision can be appealed to the Supreme Court.

A new draft Turkish IP Code has been published and is expected to be enacted in the very near future.  According to the draft, gene sequences are not patentable if the discovery of such sequences is simply the result of a “simply discovery”.  In other words, new gene sequences that are not isolated through novel and inventive methods will not be patentable in Turkey.

Please continue to watch the BRIC Wall Blog for updates on this important case and the expected changes in the Turkish IP Code.

This post was written by Lisa Mueller and Himani Nadgauda of Michael Best & Friedrich LLP, and Okan Can and Muazzez Koruturk of Deris Attorneys at Law Partnership.

 

Brazilian Patent Office and the Patent Prosecution Highway Program

The Patent Prosecution Highway (PPH) pilot program between the U.S. Patent and Trademark Office (U.S. PTO) and the Brazilian Patent and Trademark Office (INPI) began on January 11, 2016. The goal of the PPH Pilot Program is to speed up the examination of patent applications pending before INPI once a notice of allowance has been issued by the U.S. PTO in a corresponding U.S. application (including related family members).

The PPH Pilot program is limited to applications filed after January 1, 2013 that claim priority to a U.S. or Brazilian application. In addition, the application must claim inventions related to oil and gas technologies, including extraction, refining, transportation and other activities–specifically, those encompassed by International Patent Codes B01, B63, C09K8, C10, E02, E21, F15, F16, F17, G01.

To participate in the PPH pilot program, an applicant must submit a copy of the Notice of Allowance issued by the U.S. PTO. Additionally, pursuant to Rule # 154/2015, an Applicant must file a request (using service code 277) and pay the requisite fee of R$1,775 (approximately US $420).

On February 10, 2016, INPI granted priority examination to the first patent applications filed under the PPH pilot program. The applications were: BR 10 2013 000290-9 filed by Suncoke Technology and Development LLC on January 4, 2013; BR 10 2013 032934-7 filed by Afton Chemical Corporation on December 20, 2013; and BR 10 2014 017479-6 filed by Afton Chemical Corporation on July 16, 2014. The small number of Applicants (just two) invoking the PPH pilot program thus far might be the result of the subject matter limitations of the PPH pilot program.

While the PPH pilot program can be viewed as an important step by INPI in addressing the patent application backlog, the limitation of the program only to oil and gas inventions (to the exclusion of inventions in important fields such as telecommunications, pharmaceuticals and biotechnology), may result in Rule # 154/2015 being challenged before Federal Courts.

An English translation of INPI’s Rule # 154/2015, implementing the Pilot Program, is available here:  RULE154

This post was written by Lisa Mueller and Roberto Rodrigues.

 

Foreign Filing Restrictions and Licenses in Russia – Part 4

This is part 4 in our series examining foreign filing restrictions and licenses in the U.S. and in a number of countries throughout the world. To view part 1, foreign filing restrictions and licenses in the U.S., click here.  To view part 2, foreign filing restrictions and licenses in China, click here. To view part 3, foreign filing restrictions and licenses in India, click here.

Foreign Filing Licenses in Russia

According to Article 1395 of the Civil Code of the Russian Federation, if an invention is created in Russia, then an application directed to the invention must be filed in Russia, regardless of the nationality of the inventors involved. This includes inventions made by foreign citizens and jointly by Russian and foreign inventors resulting from any type of collaboration. Also included are inventions made by employees for their employer (regardless of whether or not the employer is Russian). 

There are three ways to file a patent application in Russia:

  1. File a Russian patent application with the Russian Patent Office;
  2. File a regional Eurasian patent application, designating Russia, with the Eurasian Patent Office (this method generally is about twice as expensive as filing directly in Russia with the Russian Patent Office); or
  3. Designate/elect the Russian Federation in a Patent Cooperation Treaty (PCT) application and enter the national phase before the Russian Patent Office.

The requirement for first filing in the Russian Federation exists so that the Russian government can carry out an examination on the patent application to determine if the application contains a state secret. This examination must be carried out before a foreign (non-Russian) patent application is filed.

It is important to note that if the Applicant (such as an entity or individual filing a patent application) is a foreign citizen or a foreign legal entity, then the subject matter of the patent application filed in Russia cannot be classified as state secret.

A patent application can be filed abroad in the case of:

  1. Six months have passed since first filing the patent application in Russia; or
  2. After a foreign filing license is obtained

After a patent application has been filed with the Russian Patent Office, the patent application undergoes examination for six months at no cost to the Applicant. If the Applicant has not been notified by the Russian Patent Office within six months of filing the patent application, then the Applicant is free to file abroad without further approval.

If the Applicant wishes to accelerate this proceeding and file the patent application abroad earlier, then the Applicant can file a request for examination concerning the presence of a state secret. In this case, a foreign filing license can be expected to be granted within three to four months from filing the request for examination.

If an application is filed in violation of the first filing requirement and the application comprised state secret information, this will result in criminal penalties for the Applicant. If a patent application is filed abroad before than six months have passed since first filing in Russia or if a foreign filing license was not obtained—Applicant will be required to pay a monetary fine.

This post was written by Lisa Mueller and Himani Nadgauda of Michael Best and Vladislav Ugryumov of Gowlings.

 

Foreign Filing Restrictions and Licenses in India – Part 3

Foreign Filing Restrictions and Licenses in India – Part 3

This is part 3 in our series examining foreign filing restrictions and licenses in the U.S. and in a number of countries throughout the world. To view part 1, foreign filing restrictions and licenses in the U.S., click here. To view part 2, foreign filing restrictions and licenses in the China, click here.

Foreign filing licenses in India

There are a myriad of reasons an Applicant (such as an entity or individual filing a patent application) may wish to obtain a foreign filing license to first file a patent application abroad rather than directly in India. These include:
• A desire to cater to foreign markets outside of India;
• The subject matter of patent application has no or low market potential in India;
• The subject matter of patent application is considered to be non-patentable subject matter in India; and/or
• There are research and development teams across countries are working together

Obtaining a foreign filing license in India provides an Applicant with the requisite permission to file a patent application outside of India. The specifics involved in this process are described below.

The Indian Patent Office rules are unique in that the requirement for obtaining a foreign filing license is not necessarily based on the place of invention, but the resident status of the inventor. What constitutes “resident” status in India is also discussed in more detail herein.

If a person is considered to be resident in India, then a foreign filing license is needed in the cases of filing a patent application directly in a foreign country less than 6 weeks from filing the application in India or without a direct filing in India. Examples of specific cases requiring a foreign filing license include:
• Filing patent application directly in a foreign country, without first filing in India
• Filing international patent application under the Patent Cooperation Treaty (PCT) in a country other than India, without first filing in India
• Filing patent application directly in a foreign country, less than 6 weeks from filing in India
• Filing patent application under the PCT in a foreign country other than India, less than 6 weeks from filing in India

What are the Indian Foreign Filing Restrictions?

Similar to other countries, the procedure for obtaining a foreign filing license in India is designed with the intention of allowing the Indian government to monitor inventions, especially the inventions that relate to defense/atomic energy and those that are relevant to national interests.

The Indian Patent Office is administered by the Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM) and it administers the Indian patent law. The Indian Patent Act (IPA) of 1970 consolidates the law relating to patents in India. The foreign filing license requirement is detailed in Section 39 of the IPA, as reproduced below.

39. Residents not to apply for patents outside India without prior permission.—
1) No person resident in India shall, except under the authority of a written permit sought in the manner prescribed and granted by or on behalf of the Controller , make or cause to be made any application outside India for the grant of a patent for an invention unless—
a) an application for a patent for the same invention has been made in India, not less than six weeks before the application outside India; and
b) either no direction has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.
2) The Controller shall dispose of every such application within such period as may be prescribed:
Provided that if the invention is relevant for defense purpose or atomic energy, the Controller shall not grant permit without the prior consent of the Central Government.
3) This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India.

35. Secrecy directions relating to inventions relevant for defense purposes.—
1) Where, in respect of an application made before or after the commencement of this Act for a patent, it appears to the Controller that the invention is one of a class notified to him by the Central Government as relevant for defense purposes, or, where otherwise the invention appears to him to be so relevant, he may give directions for prohibiting or restricting the publication of information with respect to the invention or the communication of such information.
2) Where the Controller gives any such directions as are referred to in subsection (1), he shall give notice of the application and of the directions to the Central Government, and the Central Government shall, upon receipt of such notice, consider whether the publication of the invention would be prejudicial to the defense of India, and if upon such consideration, it appears to it that the publication of the invention would not so prejudice, give notice to the Controller to that effect, who shall thereupon revoke the directions and notify the applicant accordingly.
3) Without prejudice to the provisions contained in sub-section (1), where the Central Government is of opinion that an invention in respect of which the Controller has not given any directions under sub-section (1), is relevant for defense purposes, it may at any time before grant of patent notify the Controller to that effect, and thereupon the provisions of that sub-section shall apply as if the invention where one of the class notified by the Central Government, and accordingly the Controller shall give notice to the Central Government of the directions issued by him.

Therefore, a foreign filing license is required if an Indian resident (either an Applicant, an inventor, or one inventor out of several inventors) wishes to file a patent application directly in a foreign country without first filing an application in India or if an international filing is filed within 6 weeks from the date of filing in India. However, if a patent application is filed in India, a foreign filing license is not needed if 6 weeks have passed since the Indian filing date.

In order to obtain a foreign filing license, permission is needed from the Controller (Controller General of Patents, Designs, and Trade Marks).

In order to request a foreign filing license from the Indian Patent Office, an Applicant must provide the following:
• “Form 25” titled “Request for Permission for making Patent Application outside India”
• The requisite fee
• A brief description of the invention covering the underlying inventive concept known to the Applicant at the time of making a request for the foreign filing license; The title of the invention and any related drawings should also be included
• The name(s), address(es), and nationalit(y/ies) of the inventor(s)/applicant(s) who are considered to be resident of India
• Names of co-inventors who are not resident of India
• The Power of Attorney from the inventor(s)/applicant(s) who are resident of India (mentioning their Indian addresses)
• Name, address, and nationality of any Assignee
• The country/countries in which the patent application is expected to be filed after obtaining the foreign filing license from the Indian Patent Office
• Reason for making such application (e.g. low market potential in India, non-patentable subject matter in India)

The Indian Patent Office generally acts on requests for foreign filing restrictions within 21 days from the date of filing the request, unless the invention relates to defense and atomic energy according to Rule 71, The Patent Rules, 2003, in which case the Controller shall not grant the foreign filing license without the prior consent of the Central Government.

71. Permission for making patent application outside India under section 39

(2) The time within which the Controller disposes of the request made under subrule (1), except in case of inventions relating to defence and atomic energy applications, shall ordinarily be within a period of twenty-one days from the date of filing of such request.

Who is subject to Indian Foreign Filing Restrictions?

The residential status of the applicant is relevant, while nationality and place of invention creation is not. Note that a foreign citizen can be a resident of India and an Indian citizen can be a resident of a foreign country.

Additionally, if there are joint inventors (and one or more of the inventors are Indian residents), then it is advisable to apply for a foreign filing license before filing the application.

The definition of “resident” of India is not defined in the IPA. Therefore, the meaning of resident can be interpreted from the Indian Tax Act of 1961 and the Foreign Exchange Maintenance Act of 1999, shown below:

According to Section 6 of the Income Tax Act of 1961, the term “resident” is defined as:
(1) An individual is said to be resident in India in any previous year, if he—
(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or
(b) [Omitted]
(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.
[Explanation 1].—In the case of an individual,—
(a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;
(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted.
[Explanation 2.—For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.]
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.
(3) A company is said to be resident in India in any previous year, if—
(i) it is an Indian company ; or
(ii) during that year, the control and management of its affairs is situated wholly in India.
(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.
(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.
(6) A person is said to be “not ordinarily resident” in India in any previous year if such person is—
(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.

According to Section 2(v) of the Foreign Exchange Maintenance Act (FEMA) of 1999, the term “resident” is defined as:
(v) “person resident in India” means-
(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include-
A. a person who has gone out of India or who stays outside India, in either case-
a. for or on taking up employment outside India, or
b. for carrying on outside India a business or vocation outside India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
B. a person who has come to or stays in India, in either case, otherwise than-
a. for or on taking up employment in India, or
b. for carrying on in India a business or vocation in India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in India;

Conversely, there is no indication in the IPA as to whether the Income Tax or FEMA definition of resident applies and there are no judicial precedents on this issue.

According to the Indian Income Tax Act, an individual is “resident” in India if he/she was in India for 182 days or more for the previous fiscal year (April 1-March 31) or was in India for a total of 365 days or more for the past 4 years, for a period or periods amounting in all to sixty days or more in that year. Note that if a person has handled the control and management of his affairs wholly outside of India, that person is not considered to be resident in India, even if he is an Indian national citizen.

If an inventor falls within the purview of any of the above definitions then he/she will need to obtain a foreign filing license before filing any international application.

Penalties

The penalties for failing to comply with Section 39 and obtain a foreign filing license before filing the application in a foreign country are the following:
• Imprisonment for up to 2 years
• Monetary fine
• Both imprisonment and fine
• Abandonment of any pending Indian Patent Application or revocation of an Indian Patent

40. Liability for contravention of section 35 or section 39

Without prejudice to the provisions contained in Chapter XX, if in respect of an application for a patent any person contravenes any direction as to secrecy given by the Controller under section 35, or makes or causes to be made an application for grant of a patent outside India in contravention of section 39 the application for patent under this Act shall be deemed to have been abandoned and the patent granted, if any, shall be liable to be revoked under section 64.

This post was written by Lisa Mueller and Himani Nadgauda of Michael Best and Nidhi Anand of Chadha & Chadha.

Current State of Data Protection and Exclusivity in Russia

The BRIC Wall Blog is pleased to present the following guest post by Ivan Burkov, Ph.D.

It has been 3.5 years since Russia joined the World Trade Organization (WTO) and implemented the right of data exclusivity for innovative pharmaceutical products. In this short period of time, the definition of data exclusivity has changed and precedent setting litigation has ensued. In this post, I attempt to delineate the most important events to date regarding data exclusivity in Russia and evaluate its protective potential.

Background

Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) specifies that the members of the WTO shall take the necessary steps to ensure the protection of undisclosed proprietary data submitted to obtain the registration of a pharmaceutical product, the origination of which involved considerable effort.

Upon accession to the WTO, Russia documented its agreement to ensure the protection of undisclosed information and test data in paragraph 2 of the Protocol of Accession of the Russian Federation to the WTO. The right of data exclusivity became effective on August 22, 2012, the official date of Russian Federation accession to the WTO. The concept was later introduced into the article 18 of Federal law № 61-FZ “On the Turnover of Medicines”, a central law for pharmaceutical industry in Russia. According to this new law, data exclusivity was defined as follows:

Receipt, disclosure and use for commercial purposes and for the purposes of medicine state registration of the information of the results of preclinical and clinical studies provided by an applicant for the registration of the medicine is not permitted without the applicant’s consent during 6 years from the date of the medicine state registration.

Concept evolution 

The original definition of data exclusivity did not specify the type of protected medicine (whether the medicine had to be an original/first-ever registered medicine or something else) or how the term was to be split between registration (data) exclusivity and market exclusivity. Since implementation of data exclusivity in 2012, the concept has been actively discussed by the industry players, law firms and other interested parties, and most stakeholders agree that data exclusivity protection alters Russian market attractiveness in the eyes of innovative medicines producers. However, no specific court cases had been instituted and it was not known whether any company had successfully used the right of data exclusivity to protect its product(s) from generic competition (as information regarding extrajudicial dispute resolution procedures was not publically available).

On December 22, 2014, the Russian president signed Federal law № 429-FZ, which introduced certain amendments to the Federal law № 61-FZ “On Circulation of Medicines”. One of the amendments (the effective date of which is January 1, 2016) affects data exclusivity. As a result, beginning January 1, 2016, data exclusivity will be defined as follows:

It is not permitted to use for the commercial purposes the results of pre-clinical trials of medicinal products and clinical trials of medicines, provided by the applicant for state registration of the medicine without his consent for the period of six years from the date of state registration of the reference medicine in the Russian Federation.

Compared to the original definition, the new definition limits the opportunities in which pre-clinical and clinical trial data are eligible for protection. Specifically, their use is prohibited for commercial purposes only. Additionally, data exclusivity is now granted to reference medicines, where a reference medicine is defined as:

 …a medicine which previously has never been registered in Russia, whose quality, efficacy and safety have been confirmed by the results of pre-clinical and clinical trials and which is used for the assessment of bioequivalence or therapeutic equivalence, quality, efficacy and safety of a generic (biosimilar) medicine.

The amendments also specify a division of the six year term between registration* (what is often referred to as “data” exclusivity in other jurisdictions) and market exclusivity: four (registration exclusivity) plus two (market exclusivity) years for generic drugs and three (registration exclusivity) plus three (market exclusivity) years for biosimilars.

* Registration exclusivity is determined from the date of registration of a reference medicine and prohibits a generic/biosimilar applicant from using the protected data of the originator for the purpose of seeking a state registration.

Russian company fights off Novartis in data exclusivity dispute

Early in 2015, Russia saw its very first court case involving data exclusivity. Specifically, Novartis Pharma AG (Novartis) claimed that local company Biointegrator LLC (Biointegrator) violated the prohibition against using Novartis’ preclinical and clinical data during state registration of its product “Nescler”, a generic version of Novartis’ fingolimod (sold under the brand name Gilenya®). Gilenya® is approved for the treatment of relapsing-remitting forms of multiple sclerosis in adults. In the suit, Novartis asked the court to cancel Biointegrator’s state registration.

Instead of focusing on the data exclusivity issue itself, the semantic vector of the case shifted towards determining the actual timing of the submission of the generic dossier. Biointegrator argued that cancellation of the registration was not appropriate because the application for state registration of “Nescler” had been submitted by another company (on April 2, 2012) prior to the date of implementation of data exclusivity provisions (August 22, 2012). Subsequent to these events, ownership rights were transferred from the other company to Biointegrator pursuant to a commercial agreement. In view of these facts, the court of first instance agreed with Biointegrator and rejected Novartis’ request for cancellation.

Undeterred, Novartis appealed. The appeal court held that an application for registration of a generic product submitted by another company did not exempt Biointegrator from liability since the generic company’s abbreviated clinical development (bioequivalence studies) relied on Novartis’ protected data and was initiated after the implementation of the data exclusivity provisions. As a result, the court agreed with Novartis’ arguments and canceled the marketing authorization of the generic product.

Unhappy with the appeal court’s decision, Biointegrator appealed to the court on intellectual rights (Intellectual Rights Court), which ruled for Biointegrator and restored the decision of the first instance court, allowing the generic product to return to the market. The arguments of the Intellectual Rights Court in holding for Biointegrator were as follows.

First, both parties agreed that Biointegrator was liable to follow the corresponding provisions of the Federal law, since the state registration application for “Nescler” was submitted after the date when the provisions for data exclusivity concept became effective. Nonetheless, the panel of judges did not agree with the appeal court that Biointegrator had used Novartis’ protected data, holding that the decision was made in violation of substantive norms. Specifically, the Intellectual Rights Court held that the appeal court incorrectly concluded that the right of data exclusivity covered any information relating to the preclinical and clinical trials of the original medicine. More specifically, according to the Intellectual Rights Court, the Federal law “On Circulation of Medicines” provides for a fast-track registration procedure for generic medicines. It requires that information on the clinical trials of an original medicine be published in specialized sources (namely, scientific journals, etc.) and that documented results of a generic’s bioequivalence/therapeutic equivalence studies be provided. Moreover, the court stated that the “…systematic interpretation of the provisions on data exclusivity suggests that the specified prohibition does not apply to publically available information, including scientific publications, and legislator recognizes the use of such information legitimate”.

The Intellectual Rights Court determined that the effectiveness of the generic product in the treatment of multiple sclerosis was based on information contained in previously published articles describing the results of clinical trials involving Gilenya® (specifically, the articles entitled “A Placebo-Controlled Trial of Oral Fingolimod in Relapsing Multiple Sclerosis” and “Oral Fingolimod or Intramuscular Interferon for Relapsing Multiple Sclerosis”). At the same time, the definition of data exclusivity under the Federal law “On Circulation of Medicines” prohibited the use of the “results of pre-clinical trials of medicinal products and clinical trials of medicines, provided by the applicant for state registration of the medicine. Unfortunately, Novartis was unable to prove that Biointegrator used undisclosed data from Gilenya®’s registration dossier, which led to the unfavorable decision by the Intellectual Rights Court.

Impact on the industry 

Data exclusivity and intellectual property protection in general are essential for the pharmaceutical industry, where extremely large sums of money are invested in developing highly risky health care solutions. At the same time, maintaining the transparency of clinical trial data is of great significance and is expected by patients, healthcare providers, companies and health authorities around the world. For example, the European Medicines Agency (EMA) bases its scientific opinions on the results of clinical trials carried out and submitted by pharmaceutical companies. Since January 1, 2015, the EMA has been proactive publishing clinical reports submitted as part of marketing-authorization applications for human medicines.

The Novartis case demonstrates that Russian authorities treat the right of data exclusivity only in connection with undisclosed, non-public information of the results of preclinical and clinical trials of an original medicine. Thus far, a very limited number of original medicines have undergone their first-ever clinical development in Russia. Rather, in most of the cases, information on the clinical trials for a medicine is already publically available from a number of sources at the time the originator seeks local registration in Russia. Therefore, the Novartis case may open the way for generic companies to bypass the legal right of originators to protect its data.

Although the Novartis case has its own unique set of facts and stare decisis is not officially practiced in Russia, innovative companies should take note of this case and its implications as an additional risk for their original products in the Russian market. At the end of the day and in the long term, the lack of intellectual property protection in Russia may affect generic producers themselves, as the attractiveness of a market which does not guarantee sufficient protection for innovators will decrease.

This post was edited by Lisa Mueller.

This article is intended to provide general information about the subject matter. Professional legal advice should be sought about specific circumstances. The opinions expressed herein are those of the author. Comments or questions on this article can be addressed to the author (vanyaburkov@gmail.com) or Lisa Mueller (llmueller@michaelbest.com).