PhRMA concerned over Sect 3(d) of India’s Patents Act as it fears other emerging markets may emulate it as a model

Ramesh Shankar, MumbaiFriday, February 12, 2016, 08:00 Hrs  [IST]

The Pharmaceutical Research and Manufacturers of America (PhRMA) continues to flog India for what it termed as a 'Generally weak IP environment' in the country and has expressed concern over Section 3(d) of India’s Patents Act as it fears that other emerging markets may emulate it as a model.

“India’s legal and regulatory systems pose procedural and substantive barriers at every step of the patent process, ranging from the impermissible hurdles to patentability posed by Section 3(d) of India’s Patents Act to the narrow patentability standards applied in pre-grant and post-grant opposition proceedings. Not only is this a concern in the Indian market, but also in other emerging markets that may see India as a model to be emulated,” PhRMA said in its latest Special 301 submission to the USTR.

Since early 2012, roughly twenty-five products have had their patent rights undermined in India. In 2015 alone, at least six products have faced issues due to the continued denial of applications under Section 3(d), infringement due to state-level marketing authorisation for generic versions of on-patented drugs, and the threat of compulsory licenses (CLs), all of which demonstrate that there have been no concrete policy improvements in India, the PhRMA further said.

Urging the USTR to provide an opportunity for a meaningful assessment of India’s IP regime through an Out-of-Cycle Review, the PhRMA in its submission to the USTR explained that TRIPS requires that an invention which is new, involves an inventive step, and is capable of industrial application, be entitled to patent protection. Section 3(d) of the Indian Patents Act as amended by the Patents (Amendment) Act 2005 adds an impermissible hurdle to patentability by adding a fourth substantive criteria of “enhanced efficacy” to the TRIPS requirements. Moreover, this additional hurdle appears to be applied only to pharmaceuticals. Under this provision, salts, esters, ethers, polymorphs, and other derivatives of known substances are presumed to be the same substance as the original chemical entity and thus not patentable, unless it can be shown that they differ significantly in properties with regard to efficacy.

Additional substantive requirements for patentability beyond that the invention be new, involve an inventive step and capable of industrial application, are inconsistent with the TRIPS Agreement. Article 27 of the TRIPS Agreement provides a non-extendable list of the types of subject matter that can be excluded from patent coverage, and this list does not include “new forms of known substances lacking enhanced efficacy,” as excluded by Section 3(d) of the Indian law. Therefore, Section 3(d) is inconsistent with the framework provided by the TRIPS Agreement. Moreover, Section 3(d) represents an additional hurdle for patents on inventions specifically relating to chemical compounds and, therefore, the Indian law is in conflict with the nondiscrimination principle provided by TRIPS Article 27. From a policy perspective, Section 3(d) undermines incentives for biopharmaceutical innovation by preventing patentability for improvements which do not relate to efficacy, for example an invention relating to the improved safety of a product, PhRMA said.