Public Health Exclusions Under Patent Law

At the start of this year, WIPO (World IP Organisation) commissioned a group of us (under the stewardship of Professor Lionel Bently, the famed Cambridge IP don and co-author of the leading treatise: Bently and Sherman on IP) to do a report on exceptions, exclusions and limitations in patent law.

This report was prepared pursuant to the work at the SCP (Standing Committee on the Law of Patents) and will be tabled at the 15th SCP session this October.

The background to this report has been articulated thus:

“At its thirteenth session, held from March 23 to 27, 2009, the Standing Committee on theLaw of Patents (SCP) decided that the Secretariat would “commission external experts astudy on exclusions, exceptions and limitations focused on, but not limited to, issues suggested by members, such as public health, education, research and experimentation and patentability of life forms, including from a public policy, socio-economic development perspective, bearing in mind the level of economic development” (document SCP/13/7, paragraph 9(c)(i)).”

The authors of the report are as below:

Annex I: Professor Lionel Bently, Center for Intellectual Property and Information Law,
Cambridge University, United Kingdom;

Annex II: Professor Brad Sherman, University of Queensland, Australia;

Annex III: Professor Denis Barbosa, Catholic University of Rio de Janeiro and
Rio Grande do Sul, Brazil;

Annex IV: Professor Shamnad Basheer, National University of Judicial Science, India;

Annex V: Professor Coenraad Visser, University of South Africa, South Africa; and

Annex VI: Professor Richard Gold, McGill University, Canada.

To download all the reports, click here.

Our report (marked as Annexure IV and authored by Prashant Reddy, Shashwat Purohit and me) deals with “public health” exclusions. I reproduce parts of our introduction here:

“There is much debate on whether or not patents foster a higher rate of new ideas, and if so, to what extent. More importantly, the issues are technology specific, and evidence that patents may help in an investment heavy industry such as pharmaceuticals may not be readily transposable to industries such as Information Technology and semiconductors. Further, there is also the issue of developing and least developed countries that are net importers of technology.

The question is whether patent regimes promote technology transfer to these countries or whether they effectively curb the potential growth that these countries might have experienced, had they had the freedom to imitate and learn; freedoms that many of the developed countries enjoyed in the pre TRIPS era. For these countries, the potential use of patent eligibility exclusions is far more significant in driving national policy.

A brief survey of case law from developed economies would suggest a restricted reading of eligibility exclusions. However, developing countries such as India opt for a wide reading of such eligibility exclusions, reflecting their specific national priorities. Although we’ve categorised section 3(d) of the Indian Patents Act as an “impure” patent eligibility exclusion later in this chapter, it may help to consider this section for the purpose of this argument.

Section 3(d) seeks to exclude a large number of similar chemical/pharmaceutical substances from patentability by providing that only those derivatives that demonstrate significantly enhanced efficacy would be patentable. This exclusion has been expensively interpreted by patent office and the courts: notably, the term ‘efficacy’ in the explanation to Section 3(d) of the Patents Act, 1970 has been interpreted in Novartis AG & Another v. Union of India & Others, 2007 4 MLJ 1153 at ¶ 13 to include only “therapeutic” efficacy, with the result that a number of derivatives that demonstrate non therapeutic advantages such as heat stability etc are likely to be excluded.

For developing countries, patent policies are not just about increasing the rate of innovation, but are to be calibrated to take into account concerns of “access” to technology goods. The question of access is most significant in the context of pharmaceuticals and public health. Therefore the patent regime cannot be hermetically sealed off from other public policy concerns such as health. Indeed, one often witnesses a conflict between patent rights on the one hand, and social values, public policies and fundamental rights on the other. The issue for most countries then is to balance out these competing and often conflicting concerns and devise a regime that would, while furthering innovation outcomes, also not erode important values such as health.

It is a truism that patents often cause price rises. A variety of tools exist to regulate such price rises and ensure affordable access to consumers, particularly in the context of drug patents and developing countries. Indeed most such measures revolve around ex-post regulatory mechanisms such as compulsory licensing that help limit the impact of patents and in the process promote public health goals. This chapter seeks to evaluate the patent and public health interface from the point of view of ex-ante mechanisms i.e. ways in which countries have sought to limit the grant of patents to certain categories of subject matter in a bid to promote access to public health goods.”

Amongst the various exclusions that could potentially further public health objectives, we limit ourselves to two exclusions: the “method of medical treatment” exclusion and the “morality” exclusion.

In so far as our Indian section is concerned, we try and draw out propositions from opposition cases (from the patent office) as best as we can. As many of you know, courts are still relatively new to patent matters and it will be a matter of time before they begin to yield sound propositions on various statutory exclusions.

Before I sign off on this, I want to place on record my genuine admiration for two final year law students (Rohan Sahai and Medha Marathe) at NUJS that we roped in at the last minute. One of our co-authors on this report fell seriously ill towards the end of the report and I sos’ed these two students for help. Not only did they come up to speed on complicated patent concepts and extensive literature surveys in the shortest possible time, but managed to do a brilliant job of helping us finish the report and contributing significantly on the India section.

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