Patents

Evergreening of Patents

/ / Evergreening of Patents

The process of evergreening of patents is a social ideal rather than a legal principle. In this,  innovators try to extend life of their patents using various means and continue to maintain a monopoly in the market. As per Bansal, Sahu et al. (2009), evergreening is defined as “different ways wherein patent owners take undue advantage of the law and associated regulatory processes to extend their IP monopoly particularly over highly lucrative ‘blockbluster’ drugs by filing disguised/artful patents on an already patent-protected invention shortly before expiry of the ‘parent’ patent”.

Evergreening is a predominant aspect of pharmaceutical patenting. As per statista.com, in 2014, total pharmaceutical revenue worldwide had exceeded 1 trillion U.S. dollars worldwide. When you consider the amount of money involved, there is a high probability that the companies in these fields will use every trick in the book to stay ahead in the game.

One such practice is that of evergreening of Patents. Companies make minor changes in their drug formulations which may or may not increase the efficacy of drugs and then they try to get an extension on their existing patent. However, this process is hardly ever mentioned explicitly in patent protection cases.

This practice, though frowned upon, is still prevalent in some countries.

There are various international agreements like TRIPS, AUFSTA, and KORUFSTA which regulate and try to curb such practices.

International Practices and agreements:-

Various countries have come together to enact laws and provisions to prevent pharmaceutical companies from misusing loopholes in the laws that were made to protect the consumers.

Canada

After NAFTA (North American Free Trade Agreement), Canada overhauled its system related to evergreening practices in 1993. As per Canadian Notice of Compliance(NOC) regulations, departments that dealt with grants of patent and other compliances were prevented from issuing an authorization to generic drug makers for the manufacture of drugs until all the relevant patents on a brand name product have expired. After NAFTA induced regulations, whenever a generic drug manufacturer submits an application for any new product, it also sends a Notice of Allegation(NOA) stating that none of their patents has been infringed.

Australia

In order to comply with international standards, the Australian government had to make certain changes in its existing laws. Most of the changes were made to sections related to linkage.

A new section 26B was inserted in the Therapeutic Goods Act, 1989. As per the new section, whenever an application for a new product is made, the manufacturers of the product had to state that their product was not infringing upon an existing patent and/or the original owner of the patent has been notified.

To counter the effects of section 26B, Sections 26C and 26D were inserted to Therapeutic Goods Act 1989. The main objective of section 26C and 27D was to prevent patent holders from getting an extension on their patents by taking advantage of loopholes and by taking undue benefit of the Justice system.

United States of America

Evergreening emerged as a concept emerged in the USA after the passing of Hatch — Waxman legislation. In 2002, the Federal Trade Commission, after an extensive inquiry found out that over 75% of applications by generic pharmaceutical manufacturers were in some way or other were involved in litigation initiated by the original patent holders. To counter this trend, the FTC (Federal Trade Commission) recommended that only one evergreening injunction can be filed by a company.

The U.S code of patent law 101,102,103 also states a requirement for the grant of a patent is utility, innovation, and non-obviousness. As per 35 USC 101 “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent, therefore, subject to the conditions and requirements of this title”

India

India changed its Patents Laws in 2005 to comply with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement. Before the amendments of 2005, pharmaceutical manufacturers were not granted patents. However, after the changes, the rights of the manufacturers were recognized.

Novartis,  a well-known drug maker had made an application for a grant of patents in 1997. Due to laws that prohibited the government from granting patents related to agriculture and pharmaceutical companies, the application from Novartis was not entertained.

After the changes of 2005, Madras Patent Office 2006, rejected the application from Novartis for the drug Glivec stating that the said drug did not exhibit any major changes in therapeutic effectiveness over its pre-existing form, which was already patented outside India.

As per the patent office, the new formulation did not enhance the efficacy of the drug in any new way. They took into consideration Section 3(d) of the Indian Patents (Amendment) Act, 2005 which is reproduced below for the benefit of readers.

the mere discovery of a new form of a substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of 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”.

To overturn the decision of the Patent Office, Novartis filed two writ petitions in Madras High Court, one challenging the decision of the Patent Office and the other challenging the validity of section 3(d) of the Patents Act,2005. The writ petitions were refused by the Court which stated that it does not have the jurisdiction to try the matter.

As Novartis couldn’t get relief from the HC, they moved IPAB (Intellectual Property Appellate Board) which is the appellant board of the patent office. IPAB also refused to grant relief to Novartis by citing section 3(d) of the Patents Act.

After exhausting all remedies, the pharmaceutical giant moved to the Supreme Court.

Findings of the Supreme Court

The main issues that came up for consideration were whether section 3(d) was violating other laws, novelty, and inventiveness of the drug Glivec and how section 3(d) should be interpreted.

On the controversy regarding section 3(d), the court was of the view that the main intention of the section was to curb the process of evergreening of patents by companies. According to SC curbing the practice of evergreening will lead to generic forms of expensive medicines which will help the end customers.

While deciding whether the product ‘Glivec’ was new and inventive, the court held that despite some minor changes made to the original formulations, Novartis was unable to convince the court that the efficacy of the drug has also increased.

This was a landmark judgment as it set the tone that our country wants to curb the practice of evergreening and that the end benefits of the product should help the general public and not the pharmaceutical products.

Impact on Pharmaceutical Companies

In most third-world countries, prices of the drugs are very high. Generic versions of expensive drugs help people to access medication at a lower cost. However, due to the draconian practice of evergreening, pharmaceutical companies prevent the users from accessing low-cost drugs which might help to save their lives.

The silver lining here is that lot of countries have devised mechanisms to curb such practices.

Conclusion

Even though the process of evergreening never received any formal acknowledgment from the legal fraternity, it will be naive to suggest that the practice is not prevalent.

The government and governing bodies have tried to curb such practices but have achieved limited success. However, it will be unwise to put the blame on them as the profit-making tendencies of big pharma overshadow their need for philanthropy.

Authored by Shivendra Mishra

Read more about patents here:

  1. https://blog.mikelegal.com/patents/patent-waiver-is-it-going-to-speed-up-vaccine-production/
  2. https://blog.mikelegal.com/ip-litigation/should-the-covid-19-vaccine-be-patented/

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