“Mashelkar” the “New Chemical Entity”

My first reaction on reading the Mashelkar Committee’s “Report of the Technical Expert Group on Patent Law Issues, December 2006” was –“WOW!!”

The report is extremely concise, to the point and more importantly an honest report on the issues of patentability of New Chemical Entities (NCE) and micro organism.

Briefly, the reason for the Report was that when the Patents (Amendment) Bill, 2005 was introduced in the Parliament in March, 2005 for debate to make the Patents Act compatible with India’s international obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement), issues regarding patentability of micro-organisms and the definition of 'pharmaceutical substance' to mean “a new chemical entity (NCE)” or “new medical entity (NME)” were raised. It was then decided that a Technical Expert Group on Patent Law Issues should be set up to discuss and come out with findings.

The issues referred, therefore, were two i.e. to quote verbatim from the Report-

1. whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substance to new chemical entity or to new medical entity involving one or more inventive steps; and

2. whether it would be TRIPS compatible to exclude micro-organisms from patenting.

Amongst other things, I liked the approach which the Committee took i.e. “consultative approach” which included industry associations, non-governmental organizations, intellectual property attorneys, etc. The Group studied the inputs received and also took into account other relevant literature to arrive at their assessment.

The Report concludes that it would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only and excluding micro-organisms per se from patent protection would be violative of TRIPS Agreement.

The Report very succinctly states that it is important that “incremental innovation” of NCE should be allowed and “evergreening” should be discouraged. To this extent the Report distinguishes between “incremental innovation” of NCE should be allowed and “evergreening” by stating what IP Institute, London has stated:

"It is important to distinguish 'ever-greening' from what is commonly referred to as 'incremental innovation'. 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.”

The Report is futuristic and highly progress oriented for India and would be welcomed with open arms by Indian pharmaceutical companies that are in constant battle with foreign pharmaceutical company. The only way Indian pharmaceutical companies have managed to stay in the race is by innovation. The Committee’s Report emphasising on “incremental innovation” puts forth the message that Indian Patent Office has to open its mindset and has to understand the distinction between “evergreening” and “incremental innovation”

More importantly, Section 3(d) of the Indian Patent Act, 1970 has to be interpreted with an open mind. The minute the Patent Office sees that there the patent application involves an advancement of a NCE, it immediately applies that Section 3(d) of the Act applies and the invention s not patentable. Section 3(d) of the Act reads as –

" The following are not inventions within the meaning of this Act, -
….
….

(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.
Explanation.—For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;".

This section is a negative Section which states that certain things are not patentable. The Section clearly means “certain things”, not everything. This is where the problem starts. The Indian Patent Office (IPO) considers that the Section excludes everything from patentability especially if it is in regard to pharmaceuticals. The attorneys are at continuous logger head with the IPO that if the new pharmaceutical substance satisfies the three criteria for patentability, the bar under Section 3(d) cannot apply. Of course, the onus is on the patent attorneys to ensure that they should advice the clients if there is a clear case of “evergreening” rather then criticising the IPO. To be fair on the IPO, it is finding its feet in this rapidly evolving IP world.

I would say that the Examiners should be trained and the IPO library should be stacked with patent law books from around the world that would help the Examiners to understand the subject better and also help immensely to examine the patent applications at a world class level. To this extent in a meeting between the patent agents, patent attorneys and Controller of Patents yesterday, the Controller said that Examiners are being sent abroad to understand patent practices better and subsequently apply the same in India.

Coming back to the topic of NCE, it is interesting that the grant of patents only to NCE would severely hamper the pharmaceutical industry which is finding its feet. If reports are to be believed that only 32% of some 1200 pharmaceutical substances were declared by US FDA (unsubstantiated report) as NCE goes to show to research ad develop NCE is not easy. It takes millions of Rupees to develop NCE and at the moment no Indian company has such financial strength. The strength of Indians has always been in their ability to innovate and it is in national interest that this ability should be protected and encouraged. By just allowing patents for NCE therefore is definitely not the solution or the way to grow

I would love to see the report being implemented in the IPO. According to me while the report is extremely good, its implementation is what will decide the future of the Indian patent law and Indian pharmaceutical companies. The onus is now on the government to bring this report either into an amendment format or as guidelines for IPO.