By K M Gopakumar, Research Officer, Centad

The report of the Mashelkar Committee, or the Technical Expert Group on Patent Law Issues, to give it its full name, was submitted to the Ministry of Commerce and Industry, Government of India, on December 29, 2006. The report was made available to the public on January 12, 2007. (See news report 'Patents committee recommendations generate debate'.)

The Mashelkar Committee was established with the following terms of reference:

• Whether it would be TRIPS (Trade-Related Aspects of Intellectual Property Rights)-compatible to limit the granting of a patent for a pharmaceutical substance to a New Chemical Entity (NCE) or to a New Medical Entity (NME) involving one or more inventive steps.
• Whether it would be TRIPS-compatible to exclude micro-organisms from patenting.

The committee has made the following recommendation to the government with regard to the scope of patent protection for new chemical entities:

“In the light of the above discussion, it would not be TRIPS-compliant to limit granting of patents for pharmaceutical substances to new chemical entities only. However, every effort must be made to provide drugs at affordable prices to the people of India. Further, every effort should be made to prevent the grant of frivolous patents and ‘ever-greening’. Detailed guidelines should be formulated and rigorously used by the Indian Patents Office for examining the patent applications in the pharmaceuticals sector so that the remotest possibility of granting frivolous patents is eliminated.”

The following paragraphs offer a critique of the major findings of the committee, with regard to the above recommendation, and which led to the above recommendation.

The committee says: “Granting patents only to NCEs or NMEs and thereby excluding other categories of pharmaceutical inventions is likely to contravene the mandate under Article 27 to grant patents to all ‘inventions'. Neither Articles 7 and 8 of the TRIPS Agreement nor the Doha Declaration on TRIPS Agreement and Public Health can be used to derogate from this specific mandate under Article 27.”

With these two lines, the committee concludes that limiting the scope of patentability to new chemical entities would violate the TRIPS obligation under Article 27. In other words, the committee brushes aside its mandate, that is, to examine the above legal question, and instead indulges in rhetoric.

The committee is expected to give its reasons, whatever they may be, for making the above assertions.

A quick analysis is attempted in the following paragraphs to show the merits of the committee's view that it would not be TRIPS-compliant to limit the granting of patents for pharmaceutical substances to new chemical entities only.

• First, the committee fears that limiting the scope of patentability to NME/NCE is likely to contravene the TRIPS mandate. Further, the committee states that Articles 7 and 8 as well as the Doha Declaration on TRIPS Agreement and Public Health cannot be used to derogate the mandate under Article 27. This conclusion of the committee is based on superficial analyses. (The committee does not give any reason for even this conclusion.) Article 27 creates two obligations that are relevant to our discussion. First, both products and process patents should be available to inventions in all fields of technology, provided they are new, involve inventive steps, and are capable of industrial application. Second, there should be no discrimination of availability and enjoyment of rights on the basis of place of invention, field of technology, or place of manufacture.

• The first obligation is that product and process patents should be made available to inventions. However, availability does not mean grant of patent to all patent applications. Grant of patent is based on the applicant's ability to satisfy patentability criteria and any other relevant requirements. According to Article 27, patents are granted to an invention. Significantly, TRIPS does not offer any definition for “invention”, it only mentions the basic requirements for an invention to become eligible for patent protection. This offers a lot of freedom to member states to determine the meaning of “invention” as well as to exclude applications for secondary patents from patent protection. Patents for new drug use, or a new combination of drugs, can be excluded from patent protection by defining invention in this manner.

  Further, all inventions become eligible for patents only when they satisfy the three criteria of novelty, inventive step, and industrial application. Since TRIPS leaves it to member countries to define these three criteria, this gives an opportunity to the implementing country to determine the scope of patentability, that is, will it be limited to new chemical entities or will it also include incremental innovations (not inventions). Since most incremental modifications/innovations fail to satisfy the high threshold level of patentable criteria, they would not be eligible for patent protection.

• According to the second obligation under Article 27, what is prohibited is discrimination of availability and enjoyment of patent rights on grounds of place of invention, field of technology, and place of manufacture. This means that discrimination on other grounds is permitted.

  Further, the prohibition is only against discrimination and not differentiation. In other words, differentiation is still permissible. The WTO Disputes Panel recognised this reasoning in the EC-Canada Case (WT/DS 114). Therefore, limiting the scope of patentability to new chemical entities does not violate the obligation of non-discrimination as to the field of technology, under Article 27 (1). Thus it cannot be argued that limiting patentability to new chemical entities would be discriminatory, as the limitation would only be with respect to the pharmaceuticals sector.

  While upholding the Bolar provision, the panel held that: “Article 27 prohibits only discrimination as to the place of invention, the field of technology and whether products are imported or produced locally. Article 27 does not prohibit bona fide exceptions to deal with problems that may exist only in certain product areas.”

• Again, as stated earlier, the word ‘availability' does not mean the grant of patent under all circumstances. The non-discriminatory provision does not prevent member countries from fixing the threshold of patentability criteria. Patentable criteria are applicable to all fields of technology and do not discriminate against any technology. Therefore, every country has the freedom to fix a high threshold for patentable criteria, and the exclusion of discoveries from patentability would not be incompatible with the TRIPS obligation. Therefore, TRIPS leaves it to member countries of the WTO to define certain key provisions that determine the scope of patentability.

  The agreement permits states to “determine the appropriate method” to implement the provisions of the TRIPS Agreement within their legal system. There is a legislative flexibility within the TRIPS framework to determine the scope of patentability by providing suitable definitions of the three basic criteria of novelty, inventive step, and industrial application. In its report, the committee has neither examined nor stated reasons for these methods of restricting the scope of patent protection.

• The objective of TRIPS, mentioned in Article 7, states: “The protection and enforcement of intellectual property rights should contribute… to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare…” On the objectives of TRIPS, India's submission states: “…patent rights should be exercised coherently with the objectives of mutual advantage of patent-holders and the users of patented medicines, in a manner conducive to social and economic welfare and to balance of rights and obligations. Where confronted with specific situations where the patent rights over medicines are not exercised in a way that meets the objectives of Article 7, members may take measures to ensure that they will be achieved…”

  India's socio-economic context, where millions are unable to access the public healthcare system, requires that it balance the right of access to affordable medicines with patent rights. While the introduction of product patents is of great advantage to pharmaceutical companies that hold patents, restricting patent protection to new chemical entities will provide relief to Indian patients who will be able to access affordable pre-1995 drugs produced generically.

• Further, the principles of implementation under Article 8 states: “Members may, in formulating or amending their national laws and regulations, adopt measures necessary to protect public health and nutrition and to promote the public interest in sectors of vital importance to their socio-economic and technological development…”

  According to India's submission, “any interpretation of the provisions of the Agreement should take into account the principles set forth in Article 8. The reading of such a provision should confirm that nothing in the TRIPS Agreement will prevent members from adopting measures to protect public health, as well as from pursuing the overarching policies defined in Article 8”. Hence, India is free to limit the scope of patentability to new chemical entities in its Patents Act, to protect public health.

• It is a well-known rule that any treaty obligations should be interpreted in light of their objectives and principles. This was further stated in the Doha Declaration on the TRIPS Agreement and Public Health: “Each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.” Hence, every member country has the freedom to limit the scope of patentability.
• On the question of whether the Doha Declaration on the TRIPS Agreement and Public Health supports the limitation on scope of patentability, the answer is a big “Yes”. According to the Doha Declaration: “We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all,” (paragraph 4).

  There is no doubt that measures such as limiting the scope of patentability to new chemical entities are aimed at protecting public health by reducing the number of monopolies in the pharmaceuticals market. A lesser number of patents would provide space for generic companies, and promote access to medicines. Thus, any measures on restriction of scope of patentability should be interpreted in light of paragraph 4 of the Declaration, and the WTO Disputes Body is to give due consideration to such measures if they are aimed at protecting public health. The committee totally ignores these facts while making its assertion that, “neither Articles 7 and 8 of the TRIPS Agreement nor the Doha Declaration on TRIPS Agreement and Public Health can be used to derogate from this specific mandate under Article 27”.

• The demand for restriction of scope of patentability for pharmaceutical inventions came up in India for two reasons. First, on public health grounds. Second, on the adverse effects on the generic industry of the misuse of patents. Unfortunately, the committee has not addressed the implications of extending patent protection to ever-greening and incremental modifications of a known chemical substance on access to medicines and public health.

  The committee sets out three arguments, under the heading ‘National interest perspective', to support its view on patent protection for incremental modifications/innovations. The so-called ‘national interest perspective' considers only the interests of a few big Indian pharmaceutical companies. (The merits of the argument are discussed in subsequent paragraphs.) There is no reference to public health concerns in the report. This forces one to wonder whether public health is not a factor whilst considering the national interest.

• However, the committee is of the opinion that, “it is important to distinguish ‘ever-greening' from what is commonly referred to as ‘incremental innovations'. While ‘ever-greening' refers to an extension of a patent monopoly, achieved by executing trivial and insignificant changes to an already existing patented product, ‘incremental innovations' are sequential developments that build on the original patented product and may be of tremendous value in a country like India. Therefore, such incremental developments ought to be encouraged by the Indian patent regime”. Hence, the committee attempts to make a distinction between ever-greening and incremental innovations.

  However, the committee ignores the fact that both have the same effect, in practice, especially implications for access to medicines. It is also to be noted that according to the Indian Patents Act, a patent is granted for inventions and innovations. The same view is reflected in its recommendation. It is a well-known fact that detailed guidelines alone are of little help in preventing ever-greening and frivolous patents, without statutory support. Further, the present infrastructure of the Indian patents office does not support this view.

• The committee says: “Restricting patentability just to NCEs or NMEs could have both legal and scientific ramifications. There is a perception that even the current provisions in the Patents Act could be held to be TRIPS non-compliant. Drug discovery research is still finding its feet in India. Though many companies are investing, it will at least be a decade before a critical mass is in place, and results start accruing. Thus, restricting patentability to just NCEs would mean that most of the pharmaceutical product patents would be owned by MNCs.” Thus, the committee states that Indian industry should be allowed to patent incremental modifications/innovations in order to help them graduate to patent NCEs.

  This is a baseless argument. Patenting and product development are different. There is ample evidence suggesting that Indian companies have patented many new molecules in India and abroad. However, what they lack are the resources to develop them as products. This view, therefore, contradicts reality. Further, there is no basis for the view that only patenting of incremental modifications will make one capable of patenting NCEs. Also, the committee totally ignores the fact that limitations on patenting would help generic manufacturers use NCEs more quickly, and so benefit Indian industry. Here the committee went out of its way to make a suggestion that the government promote patenting of incremental modifications/innovations.

  Lastly, the biggest beneficiaries of patenting of incremental modifications are multinational pharmaceutical companies. There is ample evidence to show the patent rights manipulations of MNCs. The committee's recommendations are totally in line with the argument of MNCs that patenting of incremental modifications helps Indian companies and not MNCs.

• According to the committee: “In case of patenting of drugs, the protection to various forms of same-substance (salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures, etc) is often seen as ‘ever-greening' (extending incremental protection to a subsisting patent), and hence such protection is objected to. In most countries, patenting of an invention for different forms of the same substance is subjected to the test of novelty, non-obviousness (unexpected effect) and utility before it is granted patent protection. Such a protection in the form of incremental inventions in respect of known and new molecules or a process potentially provides an added advantage to an inventor or a firm to retain its market share or capture a space in the established market. However, patenting an invention does not imply that a person can practise the invention; he would have to exercise due diligence and ensure that the rights of others are not infringed.”

  Here it is very clear that the committee does not consider the public health implications of extending patent protection to incremental modifications. It may give the advantage to a firm to capture the market or to retain market share, but there is also the fact that such attempts would act as a barrier to the access of medicines. Further, too many patents on a single substance in practice kills the theoretical rhetoric of the committee that patenting an invention does not imply that a person can practise the invention. Too many patents on the same substance would lead to a patent thicket and make due diligence practically impossible.

• According to the committee: “Many drug industry stakeholders feel that use of the expression ‘new chemical entity' under the Patents Act would lead to many interpretations. While some Indian drug industry representatives feel that limiting grant of patent to new chemical entities will not be conducive to competitive growth, some others feel that patent protection should only be given based on strict compliance of the patentability criteria. Many Indian industry representatives are not in favour of widening the scope of patentability. The group examined the current level and type of R&D innovations that the Indian drugs and pharma industry was undertaking. Annexure IV and V provide some representative samples of international patents filed by the Indian industry. It is clearly seen that most of them are based on incremental inventions.”

  Here, the committee tries to argue that since Indian companies are patenting incremental modifications abroad, India should reciprocate. However, we believe that patent policies are determined on the basis of developmental concerns including public health concerns. Hence, patenting of incremental modifications elsewhere should not be grounds for doing the same in India. Lastly, some companies also use such patenting as a defensive mechanism to prevent others from obtaining monopoly rights in such markets.

(This critique includes submissions made by K M Gopakumar, Anand Grover, Project Director, Lawyers' Collective (HIV/AIDS Unit) and Leena Menghaney, Campaign Manager, Campaign for Access to Essential Medicines, Medecins Sans Frontieres, Holland, to the Mashelkar Committee)