“The three major changes expected in the US patent rule are the ones already incorporated in Indian patent rules. Though the Indian rules were widely criticized by the US in the past, it wants to follow us now,” notes Yusuf Hamid, chairman of Cipla Ltd, ranked among India’s top three drug makers by revenue.
According to him, the post-grant opposition will allow opponents of a patent an opportunity to argue their case in the patent office, though applying for re-examination of a patent is currently allowed in the US.
According to Shamnad Basheer, a patent expert at the Oxford University’s Intellectual Property Centre, the changes to the US patent rules will widen the scope of the current “re-examination” procedure.
Since this is cheaper than litigation, it is expected that a number of Indian generics will prefer this remedy. And, if the patent is cancelled, any generic firm can enter the market immediately after getting approval from the industry regulator.
In contrast, currently generic firms have to file what are called Para IV filings, under the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, which allows the challenger to find loopholes in patents.
In the filing, patents are circumvented by either finding a fault in it or proving that the generic equivalent is “non-infringing”. Typically, this process which ends up in courts, lasts for less than a year but can be very expensive.
“Post-grant opposition in the US will be good as it provides an alternative forum, other than expensive litigation, to tackle patents given to dubious inventions,” said drug maker Ranbaxy Laboratories Ltd’s executive director Ramesh Adige. “Overall, (the US reform) does bring a global standard to patent litigation.”
The reforms in the US patent law was triggered by the US Supreme Court, for raising “patentability” standards. While reacting to the very liberal test for determining “non obviousness” or “inventive step” by a lower court last year, the court had asked to raise the threshold for patentability. Under the apex court’s direction, the lower courts have already begun to apply tighter standards while taking decisions on patent litigation, say experts.
Another recommendation by the court was that an injunction in a patent case should not be automatic but should instead depend on the facts of the case. Subsequently, in several electronics and information technology cases, the courts have not granted injunctions but only damages. “If applied to pharma, this would greatly favour the generic companies,” said Basheer.
“At first sight, these bills seem to be pro-generic. Since several bills are awaiting deliberation, we would need to see the fineprint and the final form (in which) these bills are cleared,” said a senior patent executive, who preferred anonymity, at Sun Pharmaceutical Industries Ltd, one of the active Indian companies in the US generics market.
The US patent reforms, if passed by the Senate, will also have provision for compensatory damages, among the most controversial provisions in the Act, and being opposed by big drug companies. Currently, in most of the cases involving patent infringement, the court grants damages based on what is called the “entire market value” rule.