After Years of Waiting, Your or Your Competitor’s Patent Application May Quickly Issue in Brazil. Are You Ready?

The Instituto Nacional da Propriedade Industrial (INPI), also known as the Brazilian Patent and Trademark Office (BRPTO), may soon automatically grant approximately 231,000 currently pending patent applications in an effort to reduce the backlog of unexamined patent applications that have plagued the office for years.  As many of our readers know, the backlog of unexamined applications has resulted in pendency periods on average of at least ten (10) years.  Although expedited examination is available for green technologies, oil and gas technologies (under the patent prosecution highway (PPH), limited pharmaceutical applications, and when an Applicant can demonstrate clear infringement, these measures have failed to put a significant dent in the existing backlog.

In July 2017, the Brazilian government stated that it was considering an emergency measure authorizing INPI to automatically grant approximately 231,000 pending patent applications by 2020.  More information on this measure can be found at the following links:  here, here and here.  Although the announcement of this “automatic” grant has been highly controversial, INPI has implied that it has few, if any other options for dealing with the current backlog. Interestingly, some examiners are threatening to go on strike against the measure.

The emergency measure involves a simplified examination procedure in which INPI would automatically grant any unexamined applications that do not have any outstanding annuity payments due and do not have pre-grant submissions filed by parties against the granting of the patent.  Pharmaceutical applications or divisional applications where the parent application has not yet been examined, are excluded from the measure.

Proposed rules for implementing the new measure were available for public comment until August 31, 2017.  Interestingly, during recent meetings, INPI has suggested that proposals made by local associations that add complexity to the process, such as the possibility of amending claims prior to grant or requesting substantive examination after grant, will likely be disregarded.

While the exact details and the timing of implementation of the measure are unknown, now is the time for Applicants with pending non-pharmaceutical or (certain) divisional applications to be developing a strategy to take advantage of the measure while minimizing any potential risks.  For example, Applicants with products having a short product life span should consider taking full advantage of this emergency measure.

The measure as currently drafted contains an “opt-out” clause in which an Applicant may, within 90 days, request that an application not be automatically granted but instead be subject to regular, substantive examination.  Applicants should strongly consider using the “opt-out” option for applications covering very important inventions and/or if the claims as originally filed do not provide the desired coverage (especially since INPI is likely to disregard any amendments made after the application was filed).  Moreover, Applicants should examine applications of competitors since the measure provides the opportunity for third parties to prevent the automatic granting of an application by the submission of pre-grant submissions with briefs and accompanying prior art.  These pre-grant submissions must be filed before the emergency measure comes into effect.  Moreover, there is no cost for filing the brief before INPI.  .

Please continue to watch the BRIC Wall Blog for updates on the emergency measure for eliminating the backlog of patent applications in INPI.

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys

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 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.

 

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.

Merck’s Ezetrol and Patent Term Extension in Israel

Patent Term Extension in Israel 

Under Israeli Patents Act (Patents Act), a petition for patent term extension (PTE) must be submitted no later than 90 days from the date of regulatory approval of a drug. However, patent term extension is available only for a “basic” patent. A basic patent is a patent that protects a pharmaceutical compound (API), a process for making the API, use of an API or a pharmaceutical product containing an API, a process for making a pharmaceutical compound containing the API or a medical device that requires regulatory approval in Israel. As a result of such a broad definition, a number of patents may cover a product for which PTE is sought. As a result, each of these patents may qualify as a “basic” patent. While a patentee can select which basic patent to extend, only one basic patent can be extended for each product.

The Israeli Patent Office will extend the term of protection of a basic patent if the following conditions are met:

  1. A PTE petition is filed in good faith;
  2. The API, the process of its manufacture, its use, the pharmaceutical composition containing the API, or the medical device are claimed in the basic patent and the basic patent is in force;
  3. The pharmaceutical composition is registered according to the Pharmacists’ Ordinance;
  4. The registration is “the first regulatory approval permitting use of the compound in Israel for pharmaceutical purposes”;
  5. If a pharmaceutical composition is registered in the U.S., a PTE in Israel will only be available if a “patent of reference” was also extended in the U.S. A “patent of reference” is any patent that protects the pharmaceutical product or medical device claimed in a “basic” Israeli Patent, regardless of whether or not it corresponds to the basic Israeli Patent; and
  6. If a pharmaceutical composition is registered in any of the countries listed in Part B of the Addendum (namely, Italy, Britain, Germany, Spain and France), a PTE in Israel will only be available if a “patent of reference” has been extended in at least one of these countries.

The PTE period is calculated according to the following guidelines:

  1. The period of extension will not exceed five years;
  2. The overall period of the patent and the extension must end no later than 14 years from the earliest date in which a regulatory approval was obtained in any of the recognized countries (namely, U.S., Italy, UK, Germany, Spain and France);
  3. The period of extension will be equal to the shortest period of extension granted to a “reference” patent in any of the recognized countries; and
  4. Regardless, a PTE will expire no later than the first expiry date of a PTE of any “reference” patent in any of the recognized countries.

In Israel, the main principle is that a PTE will be granted for a period equal to the shortest duration of a PTE granted in any recognized countries. In addition, the extension period cannot exceed five years and the overall patent and extension period cannot exceed 14 years from the date of the earliest regulatory approval in any of the recognized countries.

Israeli Patent No. 110956 

Israeli Patent No. 110956 (‘956 patent) covers Merck’s drug Ezetrol ((3R,4S)-1-(4-fluorophenyl)-3-[(3S)-3-(4-fluorophenyl)-3-hydroxypropyl]-4-(4-hydroxyphenyl)azetidin-2-one), a cholesterol lowering drug. In many parts of the world, Ezetrol is marketed as Zetia.

The ‘956 patent was initially extended for a period of 1,014 days pursuant to Amendment No. 3 of the Patents Act. Under Amendment No. 3 the Israeli PTE was not linked to the shortest PTE or SPC in reference countries but to the PTE or SPC elected by the patentee. Amendment No. 7 introduced for the first time the mechanism which calls for linkage to the shortest PTE/SPC in reference countries. According to Amendment No. 7, the duration of the Israeli PTE order was linked to the shortest PTE/SPC period (meaning the number of days of extension) and to the expiration date of any PTE/SPC in a Recognized Country. The Association of Generic Manufacturers (Association) petitioned to shorten the PTE period according to Amendment No. 7 of the Patents Act. Specifically, the Association argued that according to the transitional provisions, Amendment No. 7 applied retrospectively in connection with PTE orders entered before this amendment came into force.

The Commissioner granted the Association’s petition. Specifically, the Commissioner linked the PTE period of the‘956 patent to the period of the U.S. PTE and shortened the PTE period to 496 days (which was the U.S. PTE period) instead of 1,014 days (the original PTE period). The “reference” U.S. PTE was granted approximately one year after the grant of the Israeli PTE.

Merck challenged the constitutionality of the transitional provisions applying Amendment No. 7 retrospectively. The District Court rejected Merck’s arguments. Nonetheless, the court granted Merck’s alternative basis for the appeal. Based on the legislative history and the language of the statute, Merck distinguished between linkage to the PTE period (number of days) and linkage to the expiry date of the reference PTE/SPC. Specifically, Merck argued:

  1. With respect to the linkage to the PTE period, only a reference PTE/SPC already granted at the date of grant of the Israel PTE will be eligible to shorten the PTE period; and
  2. With respect to the linkage to the expiration date, any reference PTE/SPC will count, regardless of whether it is granted before or after the grant of the IL PTE.

The court agreed this interpretation. As a result, the U.S. PTE order (granted after the Israeli PTE) was no longer relevant and the Israeli PTE was extended by additional 9 months (based on linkage to the German PTE).

The court’s decision that the period of the Israel PTE could only be linked to the period of a reference PTE/SPC granted until the grant date of the Israeli PTE could have important consequences.

Please continue to watch the BRIC Wall Blog for updates on PTE in Israeli.

This post was written by Lisa Mueller and Liad Whatsein of Liad Whatstein & Co.

Biologics and Biosimilars Bits and Bytes – December 10, 2015

Amgen files for first European Approval of a Biosimilar to Humira®

On December 4, 2015, Amgen Inc. (Amgen) announced the filing of a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) for ABP 501, a biosimilar version of AbbVie Inc.’s (AbbVie) Humira® (adalimumab). According to Amgen, its MAA submission included analytical, clinical and pharmacokinetic data. Amgen conducted Phase 3 comparative efficacy and safety studies in both moderate-to-severe plaque psoriasis and moderate-to-severe rheumatoid arthritis patients. Amgen indicated that its Phase 3 studies met their primary endpoints showing clinical equivalence to Humira®. The safety and immunogenicity of ABP 501 was also comparable to Humira®. Additionally, data to support the transition of Humira® patients to ABP 501 was also included in the filing.

This MAA filing follows Amgen’s November 25, 2015 filing of a 351(k) application with the U.S. Food and Drug Administration (FDA) for ABP 501.

Coherus Files Two New IPR Petitions against AbbVie’s Patents Covering Humira®

On December 7, 2015, Coherus Biosciences Inc. (Coherus) filed two new IPR petitions, IPR2016-00188 and IPR2016-00189, against AbbVie’s U.S. Patent Nos. 9,017,680 and 9,073,987 covering Humira®. These filings come almost a month after the November 9th filing by Coherus of IPR petition, IPR2016-00172, against another AbbVie patent covering Humira®, U.S. Patent No. 8,889,135. Coherus’ three IPR petitions can be found here: 1. IPR201600188 2. IPR201600189 3. IPR201600172. This brings the total number of IPR petitions filed against AbbVie patents covering Humira® to five. Earlier this year, on June 26, 2015 Amgen filed IPR petitions, IPR2015-01514 and IPR2015-01517 against two other AbbVie patents, U.S. Patent Nos. 8,916,157 and 8,916,158.

Infliximab Biosimilar Approved in Korea

On December 4, 2015, Samsung Bioepis Co., Ltd., (Samsung Bioepis) announced that Korea’s Ministry of Food and Drug Safety (MFDS) approved Renflexis®, a biosimilar version of Remicade® (infliximab), also known as SB2. Renflexis® was approved for the treatment of rheumatoid arthritis, ankylosing spondylitis, Crohn’s disease, pediatric Crohn’s disease, ulcerative colitis, pediatric ulcerative colitis, psoriatic arthritis and plaque psoriasis. This is the second biosimilar approved in Korea for Samsung Bioepsis, a joint venture between Biogen and Samsung Biologics. The first approval was in September 2015 for Brenzys®, a biosimilar version of Enbrel® (etanercept), also known as SB4.

In February 2013, Samsung Bioepis and Merck & Co. (Merck) announced a development and commercialization agreement under which Merck would commercialize multiple pre-specified and undisclosed biosimilar products in certain partnered territories. Under terms of the agreement, Samsung Bioepis was responsible for preclinical and clinical development, process development and manufacturing, clinical trials and regulatory registration. Merck was responsible for commercialization. As a result, Merck will commercialize Renflexis® in South Korea and plans to launch in the first half of 2016.

This post was written by Lisa Mueller.