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Research exemptions not deemed as patent infringement

By Nidhi Verma        

Introduction            

According to the Indian Patents Act, 1970 (‘the Act’), a product patent gives an exclusive right to the patentee to prevent third parties, who do not have his consent, from making, using, offering for sale, selling, or importing the patented product into India till the product patent is valid. Further, a process patent gives the patentee an exclusive right to prevent such parties from using that process, and from using, offering for sale, selling or importing a product obtained directly by that process.            
Any violation of these rights by third parties who do not have patent holder’s consent will amount to infringement of the patent. However, the Act provides for certain actions by third parties which will not be considered as infringing the rights of any patentee.            

What acts do not constitute infringement? - Bolar Exemption  
         

Amongst these exceptions are activities which are required for purposes of regulatory approval. This exception is provided in Section 107A (a) of the Act.                  

107A. For the purposes of this Act,—                    

(a) any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product; shall not be considered as an infringement of patent rights.”            

The exemptions from infringement as provided by Section 107A (a) are informally known as Bolar Provisions or Bolar Exemption. The aforementioned provision is similar to 35 U.S.C. § 271(e)(1) which also exempts such activities from being considered as infringing acts. In the US, the Bolar Exemption provides an exemption from patent infringement to companies that are involved in research, trials or testing of patented inventions to seek marketing approvals. The US provision was an outcome of the US Court of Appeals for Federal Circuit in Roche Products Inc. v. Bolar Pharmaceutical Co. Inc., 733 F.2d 858 (Fed. Cir. 04/23/1984) from and hence the reference ‘Bolar Exemption’.            

Patent linkage is a system where the drug controller of a country can refuse to grant marketing approval for a generic drug if a patent for that drug is already in existence. The patent linkage system originated in the US under the Drug Price Competition and Patent Restoration Act of 1984, commonly known as the Hatch-Waxman Act. Many developing countries, such as China, Chile, Singapore, Morocco, Bahrain, Oman, and South Korea have adopted the patent linkage system. Although, an exemption from patent infringement is provided in the US to companies that are involved in research, trials or testing of patented drugs, the companies may not get marketing approval for generic drugs until patents for those drugs expire.

In India, intention of Section 107A (a) is to ensure that a generic version of a patented drug is ready, with the necessary regulatory approval, for launch in the market, immediately after expiry of the patent or invalidation rather than going through the lengthy process of getting the necessary regulatory approval only after expiry of the patent. Thus, generic companies need not wait till expiry of the patent to develop generic versions of the patented drug and hence can introduce the generic versions in the market immediately after the expiry of the patent. Consumers may benefit from this early launch since the generic versions are typically more economically priced compared to their patented counterparts.              

Although, often more applied to drugs and pharmaceutical products, it should be noted that the invention, referred to in Section 107A, refers to any invention and is not limited to drugs and related inventions. Consequently, the exemption as recited in the foregoing section would be equally applicable for other fields of invention that require similar regulatory approvals.            

Recent developments relating to Bolar exemption    
       

In India, availability of essential medicines at affordable price has led to fierce competition among pharmaceutical companies. As a result, it can be seen that large pharmaceutical companies often take their competitors to court or try using other measures to protect their patent rights.            

In March 2008, Bayer Corporation (Bayer) was granted a product patent for sorafenib tosylate, a drug used for treatment of kidney and liver cancer. Bayer marketed this drug as Nexavar in India and hence under Section 48 of the Act, Bayer got an exclusive right to prevent third parties, who did not have its consent, from the act of making, using, offering for sale, selling, or importing Sorafenib Tosylate into India till the patent is in force.                

Bayer contended that Cipla which had filed an application with the Drug Controller General of India (DCGI for marketing approval of generic version ‘soranib’ would become liable for infringement. To support their contention, Bayer relied on Section 2 of the Drugs and Cosmetics Act (DCA), 1940, and Section 48 of the Act. Relying on Section 2, Bayer pointed out that the DCA requires that its provisions are to be considered in addition to and not in derogation of “any law for the time being in force”. Bayer argued that Section 48 of the Act would be a “law for the time being in force”, as provided by Section 2 of the DCA. Bayer had submitted that a combined reading of Section 2 of the DCA and Section 48 of the Act imposes a legal obligation on the drug regulatory authority to ensure that his decision on the grant of the marketing approval should not derogate from any other law for the time the patent is in force and if it does so, it would be liable for patent infringement.

Cipla counter-argued stating that mere grant of marketing approval, would not amount to patent infringement. Cipla insisted that the patent infringement needs to be established in a Court of Law in accordance with the provisions of the Act. Cipla further argued that the role of DCGI is only to approve or disapprove the drug for marketing based on assessment of the drug for which the marketing approval was sought and not to decide if the drug for which the marketing approval was sought was infringing any patented product.             

Cipla argued that its actions would be covered under Section 107A . Clause (a) of Section 107A of the Act clearly exempts any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, such as the DCA, that regulates the manufacture, construction, use, sale or import of any product, from patent infringement.  It would be illogical to argue that regulatory approval from DCGI amounts to an infringement because then clause (a) of the Section 107A would be rendered redundant. In addition, Cipla contended that there is no concept of patent linkage in India, and accused Bayer for trying to introduce a new system in India, i.e., the patent linkage, which is only possible by bringing legislative amendments.              

Issues before the court
  • Whether DCGI can grant marketing approvals under DCA to generic versions of patented drugs        
  • Whether the grant of such marketing approvals to generic versions of a patented drug is in derogation of the Act   
  • Is there a patent linkage in terms of the Patents Act and the DCA?          
In February 2010, the Delhi High Court dismissed Bayer’s appeal to introduce the patent linkage system in India by concluding that the DCA and the Act have different objectives and serve different purposes. The Court also confirmed that there is no patent linkage system in India and DCGI can grant marketing approvals under DCA to generic versions of patented drugs without derogation of the Act. Therefore, grant of such approvals would not be considered as falling within the scope of Section 48 of the Act.            

After the Delhi High Court dismissed Bayer’s appeal, Bayer filed an appeal against the decision to the Supreme Court of India. The Supreme Court too dismissed Bayer’s appeal against the Delhi High Court's decision on its plea for patent linkage. Further, the Supreme Court pointed out that if Bayer's plea for patent linkage is accepted, it would have undermined public health safeguards contained in India's patent legislation.      

[ The author is an Associate, IPR Practice, Lakshmikumaran & Sridharan, New Delhi ]  
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